Aluminum Ingot Inventory In China Will Face Risks Of Building Up After Week-Long National Day Holiday

SHANGHAI, Sep 28 (SMM) –On September 25, 2023, China's domestic aluminum ingot inventory was 521,000 mt, down 1,000 mt from last Thursday and 131,000 mt YoY. This inventory level is relatively low compared to the past five years. Inventory levels in major consumption areas show mixed performance, with an increase in the Shanghai and Wuxi regions in East China, while a decrease in the Gongyi and South China regions. The most-traded SHFE aluminum contract experienced a strong increase last week, while spot aluminum prices in the East China region reached a new high for the year, approaching 20,000 yuan/mt. This surge in aluminum prices led to several consequences: Downstream companies were restrained from replenishing their inventories before the holiday due to high aluminum prices. The weekly aluminum ingot outflow from social warehouses in major regions was 106,100 mt last week, down 8,600 mt WoW. Domestic supply growth slowed down, and although overseas aluminum ingots flowed in, most did not meet domestic delivery standards, keeping domestic aluminum ingot inventories low. Subsequently, due to a slight decline in the molten aluminum ratio and the impact of holidays, there may be expectations of inventory accumulation. SMM will closely monitor the future flow of goods and changes in aluminum supply and demand. Currently, SMM expects post-holiday domestic aluminum ingot social inventories to be around 600,000 mt.