Social Inventory Continued Destocking, SHFE Aluminum Showed Volatile Preference [Institutional Commentary]

On Monday, the most-traded SHFE aluminum contract closed at 19,870 yuan/mt, up 0.86%. LME aluminum was closed. The SMM average spot price was 19,910 yuan/mt, up 80, with a premium of 60 yuan/mt. The Nanchu average spot price was 19,870 yuan/mt, up 60 yuan/mt, with a premium of 20 yuan/mt. According to SMM, on April 21, aluminum ingot inventory was 673,000 mt, down 16,000 mt from Thursday. Domestic mainstream consumption area aluminum billet inventory was 196,700 mt, down 12,500 mt WoW from last Thursday.

Macro news: The US Conference Board Leading Index fell 0.7% MoM in March, the largest decline since October 2023, compared to an expected drop of 0.5%. The previous value was revised from a 0.3% decline to a 0.2% increase. China's April LPR was released, with the 1-year LPR at 3.1% and the 5-year LPR at 3.6%, remaining unchanged for six consecutive months.

Yesterday's macro news was sluggish, and market sentiment remained stable, with attention focused on tariff negotiations and the US Fed's further stance. On the fundamentals, aluminum ingot destocking continued at a rapid pace this week, with end-users restocking at low prices and the pre-Labour Day holiday stockpiling window opening, leading to a temporary improvement in demand. Spot premiums rose in tandem, and aluminum prices showed a positive trend.