Aluminum Survey: Transactions Sluggish with Drastic Fluctuation

SHANGHAI, Aug. 16 (SMM) -- The SMM China Aluminum Ingot Trade Index fell below the balance line of 50% to 36.5% during August 8th to August 12th, down by 14.2% from previous week. Domestic aluminum prices gradually rebounded during the week after earlier plunge, and downstream buyers and middlemen turned active due to drastic movements, which weakened transaction confidence and led to a sluggish aluminum ingot market.

In order to objectively and accurately show China’s spot aluminum ingot trading market, SMM has surveyed spot aluminum ingot traders from different regions, of different types and scales, based on their total traded volumes, downstream purchase volumes, traders inventories, cash flows and employee numbers etc.

This survey has covered 37 aluminum traders with a total monthly traded volume over 380 kt. These traders are located in Shanghai, Wuxi, Hangzhou, Nanhai, Tianjin and Shenyang.

The SMM China Aluminum Ingot Trade Index – Transaction Index plunged to 24.3%, down by 19.8% from previous week. Recent huge up-and-down of aluminum prices had made cost risks difficult to control for purchasers, thereby dragging down buying interest. Further more, due to current seasonal low-demand, market transactions turned extremely limited during this survey period.

The SMM China Aluminum Ingot Trade Index – Trader Inventory Index rebounded to 41.9%, up by 11% from previous week, but still below the balance line of 50%. This was a combined result of weak consumption caused by drastic fluctuation and goods holding at low prices supported by limited supply.

The SMM China Aluminum Ingot Trade Index – Aluminum Price Expectation Index revered previous falling trend to above of the balance line of 50% to 51.4%, up by 38.2% from previous week. The SMM weekly average aluminum price during this survey period plunged below RMB 18,000/mt from a year-high due to a prevailing bearish sentiment. However, with positive fundamentals, the downward pace of aluminum prices is expected to significantly slow down, and fluctuation is considered to be the main trend for aluminum prices in the short term.