SHFE aluminum fluctuated in the morning session, with differences in trading volumes across regions reflected [SMM Spot Aluminum Midday Review]

SMM, April 29 Report

Today, SHFE aluminum futures fluctuated in the morning session after a significant pullback earlier. Near 10 a.m., the futures market surged rapidly, approaching 20,000 yuan/mt. In the spot market, trading conditions differed between east China and central China. Specifically, in east China, spot aluminum supply was relatively ample, and downstream restocking sentiment slowed slightly due to rising aluminum prices, making it difficult to achieve a premium. Early in the morning, the market traded SMM aluminum at a discount of -10 yuan/mt to the average price. SMM A00 aluminum was reported at 20,020 yuan/mt, up 70 yuan/mt from the previous trading day, on par with the May contract, unchanged from the previous trading day.

In the central China market, after the market discount widened earlier, hedging traders were relatively active in purchasing. Coupled with downstream restocking demand ahead of the holiday, the market premium gradually improved. With several consecutive days of stockpiling, inventory in central China continued to decline, and spot aluminum supply tightened during the day. Suppliers took the opportunity to raise premiums for shipments, and market trading activity was moderate. SMM central China A00 aluminum was recorded at 19,960 yuan/mt against the SHFE aluminum 2505 contract, up 90 yuan/mt from the previous trading day. The price spread between Henan and Shanghai was -60 yuan/mt, narrowing by 20 yuan/mt from the previous trading day. Actual market transactions were at a premium of 10-20 yuan/mt against the SMM central China price and at a discount of 60 yuan/mt against the 2505 contract.

On the inventory side, according to SMM's data on aluminum ingot inventory in three domestic regions, the total inventory of aluminum ingots in these three regions was 512,000 mt on April 29, a destocking of 15,800 mt from the previous day. In the short term, the downward space for premiums before the holiday is relatively limited. However, after the holiday, as May approaches, downstream consumption is expected to weaken to varying degrees. It is anticipated that the destocking rate will slow down, and premiums will struggle to rise.

Data source: SMM

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