The center of aluminum prices moved upward, while spot trades weakened [SMM Spot Aluminum Midday Review]

SMM, May 12: In the morning session today, the center of SHFE aluminum prices shifted upwards, breaking through 19,800 yuan/mt and surging above 19,900 yuan/mt. In terms of spot market performance, downstream enterprises in east China showed weak purchasing sentiment due to the absolute price increase, while suppliers were more eager to sell, putting pressure on spot premiums, with the market mainly transacting at parity with SMM. Today, SMM A00 aluminum was quoted at 19,810 yuan/mt, up 200 yuan/mt from the previous trading day, trading at parity with the May contract, unchanged from the previous trading day.

In the central China market, inventory continued to decline, and suppliers held strong sentiment to stand firm on quotes. However, after the aluminum price center shifted upwards, market demand decreased. Spot premiums in central China were quoted high but closed low during the day, with transactions against SMM central China at parity to a premium of 10 yuan/mt. SMM central China A00 aluminum against the SHFE aluminum 2505 contract was recorded at 19,810 yuan/mt, up 200 yuan/mt from the previous trading day. The price spread between Henan and Shanghai was 0 yuan/mt, trading at parity with the 2505 contract. The price spread between Shanghai and Henan narrowed, and some cargoes may enter the Gongyi market. Subsequent attention should be paid to the inhibitory effect of increased cargo supply on premiums and discounts.

On the inventory side, according to SMM's domestic aluminum ingot inventory data, the domestic inventory of aluminum ingots in three regions was 601,000 mt on May 12, a destocking of 19,000 mt WoW. In the short term, the post-holiday correction in aluminum prices has stimulated spot transactions, and inventory has continued to decline. Attention should be paid to changes in domestic inventory after delivery. It is expected that with the arrival of the off-season in late May, the pace of destocking may slow down.

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