SMM Aluminium Ingot and Billet Social Inventory Kept Accumulating

SHANGHAI, Feb 2 (SMM) -

Aluminium ingot: SMM aluminium ingot social inventory stood at 1.05 million mt as of Thursday February 2, up 303,000 mt from before the Chinese New Year (CNY) holiday January 20 and 61,000 mt from this Monday January 30. The figure was 181,000 mt more than the same period in 2022. The aluminium ingot social inventory added roughly 113,000 mt in the first trading week post the CNY holiday (compared with the statistics on January 28), and aluminium billet inventory rose 42,000 mt in the same period. In detail, most downstream players will not resume the production until around the Lantern Festival, and the existing trades were mainly among the traders. According to SMM research, a number of cargoes are still in transit, some of which are expected to arrive next week. Hence it is likely that the social inventory of aluminium ingot will extend the growth next week.

SMM aluminium billet: SMM aluminium billet social inventory stood at 209,400 mt as of Thursday February 2, up 42,200 mt or 25.3% from January 28. The billet inventory post a weekly gain of 25,000 mt and 18,000 mt respectively in the first trading week post the CNY holiday in 2022 and 2021, and the increment was 42,200 mt in 2023. Specifically, the inventory in Foshan added 27,500 mt from January 28 to 103,400 mt, and the cargoes were mostly from south-west China, while most sources from north-west China like Xinjiang were shipped to east China as the prices in south and east China were similar. Wuxi and Huzhou saw an increase of 4,200 mt and 8,000 mt respectively to 47,000 mt and 50,000 mt. Most downstream players in east China have basically resumed the production in the first trading week post CNY holiday, and the transactions were quite active recently. The production resumption in south China was comparatively slow, leading to huge inventory pressure. It is expected that the social inventory will keep rising next week, but at a slower pace.