Price Center Shifts Upward at High Levels, Market Transactions Driven by Rigid Demand [SMM Spot Aluminum Midday Review]

This morning, the SHFE aluminum front-month contract fluctuated at highs near 20,900 yuan/mt above the daily moving average, with its center continuing to rise. In the east China market, aluminum prices rebounded to high levels, with market sentiment dominated by a wait-and-see approach and sluggish transactions, while discounts widened. However, some suppliers remained optimistic about the market outlook and controlled their shipment pace, with no significant price collapse observed in the spot market. The SMM A00 spot price was at a discount of 70 yuan/mt against the SHFE 2503 contract, down 10 yuan/mt from the previous trading day. SMM A00 aluminum ingot prices stood at 20,820 yuan/mt, up 130 yuan/mt from the previous trading day.

In the central China market, as trucked cargoes arrived in concentration, inventory pressure in the market increased, making it difficult for premiums in the central China market to achieve transactions. Downstream processing enterprises, affected by the aluminum price rebound, mainly picked up goods under long-term contracts at monthly average prices, while spot order transactions remained sluggish, with rigid demand transactions conducted at discounts of 10 to 20 yuan/mt against the central China price. The SMM central China A00 price was recorded at 20,680 yuan/mt against the SHFE 2503 contract, up 120 yuan/mt from the previous trading day. The Henan-Shanghai price spread was 140 yuan/mt, with actual market transactions conducted at parity to discounts of 20 yuan/mt against the SMM central China price.

Regarding inventory, SMM's daily inventory in major aluminum consumption regions was recorded at 691,500 mt, with an inventory buildup of 500 mt. The absolute inventory level continued to increase but showed signs of slowing. At high aluminum prices, downstream sectors were still digesting finished goods and raw material inventories, with market transactions mainly driven by rigid demand. However, most suppliers currently hold a bullish outlook on the market, with stronger sentiment to hold back cargoes, limiting the room for further discount expansion in the spot market.

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