Why Destocking Proceeds Slowly in China Aluminum Market? SMM Reports

SHANGHAI, May 31 (SMM) –Aluminum ingot stocks in China’s five major markets (Shanghai, Wuxi, Nanhai, Hangzhou and Gongyi) continued falling last week, but the speed of decline was slow over this past month. 

SMM attributes the slow destocking to three reasons.

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First, the supply side reform had little impact on operating aluminum capacity. Second, big profit incentivized release of restarted and new legal capacity. Third, the off-season arrived in advance this year. Downstream operating rates fell sharply after entering May, SMM survey found. 

As of May 26, aluminum ingot stocks in these five regions totaled 1.17 million tonnes, down 5,000 tonnes on a weekly basis. 

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