China's Secondary Aluminum Ingot Inventory Drops by 638 mt, Foshan Sees Major Decline

[Geopolitical Risks and Accelerating Destocking Drive SHFE Aluminum Volatile Adjustment] The Middle East geopolitical situation remains volatile, market wait-and-see sentiment is expected to persist, the ex-China supply gap is expected to provide strong bottom support for aluminum prices, US Fed interest rate hikes remain uncertain, and rising energy cost expectations also form a bullish driver for aluminum prices; but high inventory pressure in China remains relatively prominent, which is expected to limit the upside room of domestic aluminum prices, with short-term domestic aluminum prices expected to mainly see volatile adjustment.

According to SMM data, as of June 8, China's aluminum ingot inventory in major consumption areas registered 1.36 million mt, down 15,000 mt from the previous Thursday and down 26,000 mt from the previous Monday.

[SMM Cast Aluminum Alloy Morning Comment: Tug-of-War Between Longs and Shorts Intensifies, Aluminum Alloy to Remain Sideways in Short Term] In the short term, ADC12 prices have limited downside room, and upside breakouts also lack effective demand-side cooperation. The overall trend is expected to be generally stable with slight rise.