Aluminum Market: The Current Situation of Transactions and Inventory Game Amid "Rising" Voices [SMM Spot Aluminum Midday Review]

This morning, the SHFE aluminum front-month contract fluctuated at highs near 20,750 yuan/mt, slightly above the daily moving average. In the east China market, aluminum prices rebounded to high levels, with market sentiment dominated by a wait-and-see approach, leading to sluggish transactions. However, some suppliers remained optimistic about the market outlook, controlling their shipment pace and showing a clear sentiment to stand firm on quotes. The SMM A00 spot price was at a discount of 60 yuan/mt to the SHFE 2503 contract, unchanged from the previous trading day, while SMM A00 aluminum ingot prices stood at 20,690 yuan/mt, up 90 yuan/mt from the previous trading day.

In the central China market, although traders were optimistic about the market outlook and showed a clear intention to stand firm on quotes, the concentrated arrival of trucked cargoes squeezed platform supplies, making it difficult for transactions at premiums in the central China market. Downstream processing enterprises, affected by the rebound in aluminum prices, mainly picked up goods under long-term contracts at monthly average prices, while spot order transactions remained sluggish. The SMM central China A00 price was recorded at 20,560 yuan/mt, up 90 yuan/mt from the previous trading day, with the Henan-Shanghai price spread at 130 yuan/mt. Actual market transactions were on par with the SMM central China price.

Regarding inventory, the daily inventory in major aluminum consumption regions tracked by SMM reached 845,000 mt, with an inventory buildup of 27,000 mt. The absolute inventory level continued to rise, and downstream sectors were still digesting finished goods and raw material inventories amid high aluminum prices. Market transactions were mainly driven by rigid demand. However, most suppliers currently hold a bullish outlook on the market, with an increasing sentiment to hold back cargoes, limiting the room for further expansion of spot market discounts.

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