There were some disturbances in aluminum billet supply

In contrast with domestic low aluminium ingots arrivals, the inventory growth of aluminum billets after the holiday was significant due to concentrated arrivals at major consumption areas. However, some aluminum billet factories in Tianlin and Debao reduced or stopped production after the holiday due to disturbance on aluminum billets supply in Guangxi. As such, arrivals of aluminum billets in south China decreased significantly mid-week, dragging down domestic aluminum billets inventories. According to SMM statistics, the domestic social inventory of aluminium billets on May 9 was 211,100 mt, down 6,700 mt from Apr 29, and down 18,900 mt from May 6. After the holiday, the inventory of aluminum billets increased first and then decreased, but still stayed at a high level in the same period of the past four years. Affected by the holiday, the amount of aluminum billets picked up from warehouses last week was 51,900 mt, down 16,600 mt WoW. SMM predicts that the supply of aluminum billets may decrease further and domestic inventories may fall below 200,000 mt in May.

Affected by fluctuation of aluminum prices at a high level, the processing fees also have been volatile and rebounded to above 300 yuan/mt in the week. On May 8, the processing fees of φ120 aluminum billets in Wuxi and Foshan climbed to 320 yuan/mt and 350 yuan/mt, and then the processing fees in the three places fell back to around 200 yuan/mt. SMM predicted that the processing fee for aluminum billets in May may be supported amid falling supply.