Domestic aluminum ingot destocking performance remained strong

The first trading week of November is coming to an end. Despite the transition between traditional peak and off-peak seasons, the main impact of poor transportation in Xinjiang has led to a continued strong destocking performance for domestic aluminum ingots since the "September-October peak season." As of November 7, 2024, SMM statistics show that the domestic aluminum ingot social inventory was 563,000 mt, and the domestic circulating aluminum inventory was 437,000 mt, continuing to decrease by 34,000 mt WoW. On YoY terms, the current domestic aluminum ingot inventory remains at a low level for the same period in the past five years, with the difference from the same period last year expanding to 122,000 mt. SMM believes that the outflows from warehouses in major consumption areas declined during the week. The main reason for the rapid destocking in November is still the poor transportation in Xinjiang. Although railway transportation in Xinjiang has improved compared to the end of October, with stations gradually dispatching cars and the in-transit goods to places like Gongyi increasing significantly MoM, the arrivals expected in mid-November will put some pressure on inventory. However, recent heavy snow in Xinjiang may cause a partial decline in transportation efficiency, leading to insufficient confidence in the market that the severe backlog in Xinjiang can be resolved in the short term, which has contributed to the continued rise in futures prices. SMM will continue to monitor the latest developments in the transportation of aluminum products in Xinjiang.