SMM March 26 News
SHFE aluminum opened higher this morning but then fluctuated and dropped back slightly. The spot market was stimulated by continued destocking, coupled with insufficient arrivals, leading suppliers to stand firm on quotes and narrowing spot discounts. Downstream purchasing was generally as needed, with some manufacturers in east China stockpiling more.
Specifically, traders in east China stood firm on quotes, with the market offering SMM A00 at +10 yuan/mt, and some at +20 yuan/mt. Today, SMM A00 was at a discount of 10 yuan/mt against the SHFE aluminum 2504 contract, with SMM A00 aluminum ingot prices recorded at 20,670 yuan/mt, up 10 yuan/mt from the previous trading day. In central China, the market turned quiet due to a rebound in futures, with transactions near parity. SMM central China A00 was recorded at 20,570 yuan/mt against the SHFE aluminum 2504 contract, flat from the previous trading day, with the Henan-Shanghai price spread at -100 yuan/mt.
Inventory-wise, according to SMM's domestic aluminum ingot social inventory in three regions, mainstream consumption areas recorded 682,500 mt of aluminum ingot inventory on March 26, destocking 8,200 mt WoW. In the short term, against the backdrop of the peak season and the growing trend of aluminum use in new energy, social inventory is expected to continue destocking, with fewer arrivals in mainstream consumption areas such as Wuxi, likely narrowing premiums and discounts in the spot market.
Data source: SMM
