[SMM Analysis] the spot price gap between Guangdong and Shanghai widens sharply when aluminum prices rise and fall.

Published: May 22, 2020 19:28

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SMM5 March 22 News: this week Shanghai aluminum futures rose and fell, rushing higher and falling, the main contract operating range moved up to 12500MUR 13000 yuan / ton. On the spot side, the spot price of Guangdong to 06 contract is 320 yuan / ton today, and the spot transaction price of East China to 06 contract is 120 yuan / ton. The spot price difference between Guangdong and Shanghai has widened sharply to 200 yuan / ton from near Pingshui last Friday.

At the beginning of the week, the purchasing demand in the market was OK, the spot in circulation was slightly insufficient, and the base gap between Guangdong and Shanghai strengthened synchronously. After the sharp rise in base prices, some smelter stocks of aluminum ingots flowed into the East China market, followed by a significant correction in spot rising water; although some imported aluminum ingots in Guangdong region also entered the market, the domestic supply increment was not much, and the weekly inventory volume dropped by more than 10,000 tons compared with the previous month. Spot is relatively tight, rising water drop is relatively small. Including shipping costs, short barges and other miscellaneous fees, when the spot price difference between Guangdong and Shanghai exceeds 200 yuan / ton, the space for East China aluminum ingots to go south to Guangdong is expected to open again.

The proportion of aluminum to water in the upstream is on the high side, and there is not much aluminum ingot transported in the southwest; the demand for aluminum ingots in the north is OK, and the transportation distance and time to the south is longer. Recently, the arrival volume of Guangdong aluminum ingots has decreased by about 30% compared with the first half of the month. Including some railway aluminum ingots and imported aluminum ingots, the supply of Guangdong aluminum ingots at the end of the month is limited. However, considering that next Tuesday (26th) is a new long month, spot rising water in Guangdong and Shanghai is facing pullback pressure, but the strong price gap between Guangdong and Shanghai will continue.

Price forecast

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