During this period (June 12-July 10), the most-traded SHFE aluminium contract went down, with the lowest point at 19,950 yuan/mt and the highest point at 21,030 yuan/mt. As of July 10, the most-traded SHFE aluminium contract closed at 20,100 yuan/mt, down 800 yuan/mt or 3.83% on the month. During the same period, the LME three-month aluminum contract moved between $2,470-2,560/mt, closing at $2,481/mt as of 15:00 on July 10, down $60.5/mt or 2.38% MoM.
According to SMM data, the average spot price of SMM A00 aluminum in June 2024 was 20,595 yuan/mt, down 0.86% MoM. The average spot discounts of SMM A00 aluminum in June recorded 56 yuan/mt, narrowing by 38.12% MoM. During June 12-July 10, aluminum prices fell. In mid-June, aluminum prices fell significantly, boosting downstream purchasing sentiment, improving spot transactions, and narrowing discounts. As the off-season for consumption deepened, downstream demand weakened, while the operating capacity of aluminum smelters continued to rise, the ingot production rate increased, and aluminum ingot inventories remained high. The spot premiums were weak, and the spot market discounts persisted.
By Region:
In east China, the overall spot transaction of aluminium was moderate, moving between discounts of 80 yuan/mt to premiums of 20 yuan/mt. Spots discounts only briefly recovered to small premiums when approaching delivery of futures contract, while the rest of the trading days remained at a discount.
In central China, spot transactions were mediocre. Affected by environmental protection and the off-season for consumption, downstream purchasing was limited. Spot discounts in central China fluctuated between 230 yuan/mt and 30 yuan/mt.
In south China, aluminum ingot transactions were relatively weak. With the arrival of the off-season and the continuous resumption of production by aluminum smelters in Yunnan, inventories were relatively weak, and spot supplies were abundant. The Guangdong-Shanghai price spread once expanded to -220 yuan/mt, and the Henan-Shanghai price spread reached a maximum of -140 yuan/mt. Later, stimulated by regional price spreads, some aluminum ingots in south China were transferred to east China. By the end of the week, with concentrated arrivals in Wuxi, inventories surpassed those in south China. The discounts in the south China market attracted large traders to actively enter the market for purchasing, narrowing the regional price spread. As of July 10, the Guangdong-Shanghai price spread narrowed to -120 yuan/mt, and price spread between Foshan and central China turned positive.
In July, the production resumption by aluminum smelters in Yunnan was basically completed, and part of the capacity of the third phase of the Huayun project in Inner Mongolia was put into operation. There is still some incremental space in the future. The operating capacity of domestic aluminum smelters continued to rise, with an expected increase in supply. On the demand side, the off-season for consumption led to weakened demand, with no significant signs of demand recovery in the short term. Current aluminum ingot inventories were at a high level for the same period in the past two years. Under inventory pressure, spot prices may maintain at a discount in the short term.
![Domestic and International Aluminum Prices Weakened in Tandem, Weak Macro Dragged Down Pre-Holiday Market [SMM Aluminum Price Weekly Review]](https://imgqn.smm.cn/usercenter/EVjRH20251217171653.jpg)
![Downstream Basically Completed Early Stockpiling, Market Transactions Returned to Sluggish [SMM Spot Aluminum Midday Review]](https://imgqn.smm.cn/usercenter/JnyfJ20251217171654.jpg)
