SMM reported on Nov 2, 2023, that domestic aluminum ingot stocks were 657,000 mt, up 4,000 mt from Oct 30, 34,000 mt from Oct 26, and 77,000 mt YoY. It's at its highest in nearly six months. With the upcoming traditional off-season, inventory pressure is significant. October's inventory trend shows a large accumulation post-double festival holiday, followed by weak supply and demand. Recent inventory build-up indicates strong supply versus weak demand, suggesting unlikely inventory reduction in the short term.
What caused the late October inventory surge? SMM identifies three main reasons:
1.A backlog of aluminum ingots in Xinjiang due to limited transport capacity arrived in bulk after transport recovery, causing a sudden increase in arrivals in Wuxi and Gongyi.
2. Inflows of imported ingots. Despite the current closure of the aluminum spot import window, some supplies from earlier, mainly Russian and Indonesian aluminum, continued to enter the domestic market, impacting Shanghai and Wuxi significantly.
3. Overall weak demand for aluminum products, especially a noticeable decline in cargo pick-up in Wuxi. Poor profitability led some aluminum rod factories to suspend or reduce production in late October, while cast ingot volume rose due to decreased domestic molten aluminum proportion and relatively high domestic aluminum prices.
![La acelerada reducción de existencias de lingotes de aluminio durante la temporada alta respalda que los precios del aluminio se mantengan firmes a corto plazo [Resumen de la reunión matutina sobre aluminio de SMM]](https://imgqn.smm.cn/usercenter/zjiqN20251217171650.jpg)
