Aluminum Prices Plunge Again, Spot Market Unusually Weak [SMM South China Spot Aluminum Daily Review]

SMM, October 15:

Aluminum prices plunged today, yet the spot market remained notably weak. As futures fell sharply, the backwardation structure expanded aggressively once again: the nearby basis consolidated on a weak note, while the deferred basis rose instead of falling and stayed at elevated levels. Selling pressure to monetize shipments intensified, and some previously profitable inventory was offloaded at low prices, disrupting the market. Mainstream offers were in a wide range from deep discounts to parity, with spot discounts persisting. Fear of high prices deepened further, with almost no willingness to enter the market. Relatively stable procurement alone could not absorb the surplus supply, leaving transactions somewhat subdued. Spot transactions were concentrated at premiums of 290–330 yuan/mt over the SHFE aluminum 2611 contract.