SHFE Aluminum Declined in the Morning Session as Downstream Sentiment Turned Cautious Again [SMM Spot Aluminum Midday Review]

SMM, February 24

—In the early trading session, the center of SHFE aluminum front-month contract fluctuated downward with a significant decline. Downstream bearish sentiment and wait-and-see attitude resurfaced, resulting in moderate purchasing activity. Transactions and shipments were mainly concentrated among traders, with relatively active trading. Specifically, in east China, trading was moderate, and spot discounts remained stable. Today, SMM A00 aluminum ingot prices were at a discount of 70 yuan/mt against the SHFE 2503 contract, unchanged from the previous trading day. SMM A00 aluminum ingot prices stood at 20,590 yuan/mt, down by 230 yuan/mt from the previous trading day.

In the central China market, downstream demand was weak, and the market focused on shipments, leading to an expansion in spot discounts. Actual transactions in the market were mainly at a discount of 10 yuan/mt against SMM central China prices. Today, the Henan-Shanghai price spread was around a discount of 220 yuan/mt. SMM central China A00 aluminum ingot prices were recorded at 20,440 yuan/mt, down by 240 yuan/mt from the previous trading day.

Regarding inventory, according to SMM domestic aluminum ingot social inventory data, as of February 24, inventory buildup reached 28,000 mt to a total of 873,000 mt. With high aluminum prices, downstream purchasing sentiment was moderate, primarily focusing on inventory digestion and just-in-time procurement. However, bullish sentiment in the market persisted, and spot discounts fluctuated rangebound.

Source: SMM

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