Domestic Aluminum Inventory Rose Notably After Weeklong Holiday

On October 12, 2023, according to statistics from SMM, the social inventory of aluminum ingots in China was 626,000 mt, down 5,000 mt from October 9, but up 130,000 mt from before the holiday, down 29,000 mt YoY. Despite this inventory being at its lowest level for the same period in the past five years, the pressure to reduce inventory remained significant. Post-holiday, there have been marked changes in the inventory in mainstream regions. The rate of inventory accumulation in East China remained high, with the Shanghai area adding 4,000 mt of inventory during the week, mainly due to the influx of imported aluminum ingots. The Wuxi region exhibited a weak capacity to reduce inventory post-holiday, and there's no sign of halting the rapid accumulation of inventory. Before the holiday, the inventory in the Wuxi region was around 100,000 mt. However, due to the transfer of goods prompted by the price difference between Shanghai and Guangdong during the holiday, as well as the arrival of regular shipments in bulk, the current inventory in the Wuxi region has reached 165,000 mt, demonstrating a strong potential to surpass the Foshan region. The post-holiday inventory in the South China region has relatively stabilized, currently standing at 167,000 mt, and trades in local spot market were active post-holiday. In the Gongyi region, despite the rapid accumulation of inventory during the holiday, a sudden shift towards inventory reduction occurred mid-week. This is mainly due to the difficulties in goods arrival from the Northwest Xinjiang region. It's anticipated that the Gongyi region will face significant inventory pressure in the week ending October 20. SMM will closely monitor the direction of future goods flow and changes in the aluminum supply and demand.