Aluminum Prices Rebound, Heightened Downstream Aversion Sentiment, Spot Aluminum Transactions Weaken [SMM Spot Aluminum Midday Review]

In the early trading session today, the SHFE aluminum front-month contract fluctuated at highs near 20,700 yuan/mt, slightly above the daily moving average. In the east China market, aluminum prices rebounded, intensifying downstream's aversion to high prices, leading to weak spot transactions. With subsequent inventory buildup, discounts are expected to widen. The SMM A00 aluminum ingot price was at 20,600 yuan/mt, up 90 yuan/mt from the previous trading day, while the SMM A00 spot price was at a discount of 60 yuan/mt to the SHFE 2503 contract, unchanged from the previous trading day.

In the central China market, affected by absolute price levels, end-user enterprises mostly adopted a wait-and-see approach. Shipment volumes from processing material enterprises showed no significant improvement, with raw material procurement mainly driven by rigid demand. Spot transactions in the central China market showed no notable improvement compared to the previous trading day. The SMM central China A00 price was recorded at 20,470 yuan/mt, up 90 yuan/mt from the previous trading day, with actual market transactions ranging from parity to a premium of 10 yuan/mt over the SMM central China price.

Regarding inventory, the daily inventory in major aluminum consumption regions tracked by SMM reached 685,200 mt, with an inventory buildup of 6,000 mt. The absolute inventory level continued to rise, putting pressure on spot premiums. Downstream aluminum processing consumption has not fully recovered, and downstream enterprises are still digesting finished product and raw material inventories amid high aluminum prices. Under the oversupply scenario, the spot market is expected to remain weak in the short term.

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