Aluminum Billet Inventories Destock for Fourth Consecutive Week; Processing Fees Rebound Across the Board [SMM Analysis]

SMM, November 5:

According to SMM statistics, aluminum billet inventories in China's major consumption areas stood at 126,000 mt on November 5, down 12,000 mt from last Thursday (Oct 29) and down 5,000 mt from this Monday (Nov 2), marking the fourth consecutive weekly decline since the National Day holiday. Inventories are now around 15,000 mt below the same period of 2025, having fallen under last year's level. In terms of off-take, aluminum billet shipments totaled 52,000 mt over October 26–November 1, down 4,000 mt week on week and lower for a second consecutive week. By region, Foshan accounted for the bulk of destocking with a drawdown of 9,000 mt; Huzhou and Wuxi posted modest declines of 2,000 mt and 1,000 mt respectively, Changzhou edged slightly lower, while Nanchang was unchanged. Notably, Wuxi ended its run of consecutive stock builds and shifted to a modest drawdown. The continued destocking was driven by both demand and supply: on the demand side, off-take fell for a second consecutive week with the decline widening and downstream pickup slowing, though rigid-demand procurement continued to absorb inventories; on the supply side, arrivals slowed across regions amid weaker aluminum prices, with inbound volumes to Foshan staying persistently low and stock-building pressure in Wuxi easing, making tighter supply the main support for destocking.

Aluminum prices moved lower in a choppy week, with the SMM A00 aluminum spot price falling from 23,740 yuan/mt last Thursday to 23,380 yuan/mt this Thursday, a cumulative decline of about 360 yuan/mt. Against this backdrop, processing fees rebounded across all regions. In Foshan, processing fees for φ90 billet were quoted at 470 yuan/mt and φ120 at 420 yuan/mt, up 90 yuan/mt from last Thursday; in Wuxi, φ90 was quoted at 470 yuan/mt and φ120 at 320 yuan/mt, both up 110 yuan/mt; in Nanchang, φ90 stood at 630 yuan/mt and φ120 at 550 yuan/mt, both up 230 yuan/mt, the largest gain among the three regions. The increases were concentrated early in the week: on November 2, quotes across the three regions rose by 50–180 yuan/mt in a single day, after which the uptrend slowed and prices shifted into high-level range-bound trading. The rebound was driven by two factors: first, lower aluminum prices pushed down the absolute price of billet, reviving downstream buying interest and strengthening producers' resolve to hold offers firm; second, rapid destocking and slower arrivals in Foshan and Wuxi tightened regional supply, underpinning the higher fees. Processing fee trends next week will depend on aluminum price movements and the sustainability of downstream restocking.

Data source: SMM