Market circulation surplus, discounts keep plunging [SMM South China Spot Aluminum Daily Review]

Published: Oct 19, 2026 16:45 (GMT+8)

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SMM, October 19:

Aluminum prices continued to rise today, while the spot market remained deeply subdued. The backwardation structure between near-month contracts kept the price spread between futures contracts exceptionally wide, and the actual basis likely stayed on a high-level downward trajectory. Additionally, the southwest region released plant inventories, and concentrated arrivals led to significant inventory buildup. These dual factors suppressed market sentiment. After a brief attempt to hold prices firm failed, sellers quickly returned to aggressive price cuts to offload cargoes and cash out, with spot circulation persistently at discounts. Demand from rush-to-buy amid continuous price rise and basis-correction restocking was relatively limited, making it difficult to absorb the surplus circulating supply, resulting in lackluster transactions. Spot transaction prices were concentrated at a premium of 235–275 yuan/mt over the SHFE aluminum 2611 contract.

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