Post-Holiday Market Trading Continues to Recover, but Inventory Buildup Still Limits Premium Space [SMM Spot Aluminum Midday Review]

This morning, the center of the SHFE aluminum front-month contract climbed steadily, breaking through 20,400 yuan/mt. In the east China market, driven by the weekend effect, just-in-time procurement by downstream processing enterprises improved. Despite the upward shift in aluminum price center, market activity continued to rebound. Additionally, with the widening spread between futures and spot prices, traders' purchasing enthusiasm increased, supporting firm premiums. SMM A00 aluminum ingot prices were at a discount of 40 yuan/mt to the SHFE aluminum 2502 contract, unchanged from the previous trading day, while SMM A00 aluminum ingot prices recorded 20,470 yuan/mt, up by 240 yuan/mt from the previous trading day.

In the central China market, the weekend effect similarly boosted activity. With downstream enterprises gradually resuming work and production, market transactions warmed up, and the aluminum price center continued to rise. Traders remained firm on quotes. SMM central China A00 aluminum ingot prices were at 20,470 yuan/mt, up by 240 yuan/mt from the previous trading day, with actual market transactions ranging from parity to a discount of 10 yuan/mt against SMM central China prices.

Inventory side, SMM's daily inventory in major aluminum consumption regions recorded 540,800 mt, with an inventory buildup of 14,800 mt. Downstream aluminum processing consumption has yet to recover, and the market remains in a phase of continuous inventory buildup. Under the oversupply situation, spot prices are expected to remain in a discount state in the short term.

Data Source: SMM

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