Review of Chinese Spot Aluminium Market (Apr 3-7, 2023)

SHANGHAI, Apr 10 (SMM) – Transactions in the spot market turned active with approaching delivery of the SHFE 2304 contract, allowing spot discounts to shrink. Discounts of SMM A00 aluminium narrowed from 70 yuan/mt to 30 yuan/mt against the SHFE 2304 contract, while discounts in Gongyi shrank from 120 yuan/mt to 50 yuan/mt against SMM A00 aluminium prices. Premiums in south China held steady in the first half of the week thanks to limited supply and increasing purchases, but wait-and-see sentiment prevailed in the second half of the week. The price difference between south and east China expanded from 65 yuan/mt the week before to 105 yuan/mt on Friday. The 20-day average of SMM spot buying intensity index showed a downward trend last week, dropping from 220 points to around 210 points.

According to the SMM weekly fundamentals forecast model, the discounts of SMM A00 aluminum will expand to 20-80 yuan/mt this week.