Entering the Chinese New Year Holiday, Market Trading Is Sluggish [SMM Spot Aluminum Midday Review]

SMM, January 24

—SHFE aluminum front-month contract fluctuated rangebound in the early trading session today, with prices rising significantly during the second trading session. Suppliers and downstream buyers in east China have entered the Chinese New Year holiday, leading to sluggish market transactions. Today, SMM A00 aluminum ingot prices were at a discount of 20 yuan/mt against the SHFE 2502 contract, flat compared to the previous trading day. SMM A00 aluminum ingot prices stood at 20,190 yuan/mt, down 10 yuan/mt from the previous trading day.

In the central China market, the overall market showed weak supply and demand. Suppliers adopted a passive selling approach during the holiday, with actual transactions mainly at a premium of 20-40 yuan/mt against SMM central China prices. Today, the Henan-Shanghai price spread was at a discount of around 90 yuan/mt. SMM central China A00 aluminum ingot prices were recorded at 20,100 yuan/mt, up 10 yuan/mt from the previous trading day.

Regarding inventory, SMM data showed that social inventory of aluminum ingots in three domestic regions increased by 7,100 mt to 330,500 mt as of January 24. In the short term, earlier in-transit cargoes gradually entered warehouses, coupled with downstream entering the Chinese New Year holiday, leading to a turning point in social inventory. However, continuous destocking in Wuxi supported regional premiums and discounts. Future attention should be paid to arrivals in east China and changes in downstream demand.

Source: SMM

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