SHANGHAI, Sept. 27 (SMM) -- The SMM China Aluminum Ingot Trade Index for the week from September 19th to September 23rd came out at 42.9%, which was below the balance line of 50%, and was down 3 percentage points from previous week. Mounting default risk in Greece, bailout discrepancies in the euro zone, pessimistic Fed view towards the US economy, increasing capital pressure at quarter’s end, rare purchases from downstream due to strong bearish sentiment and low selling interest at lower prices among goods holders due to continuously dropping aluminum prices have together contributed to the sluggish week for aluminum 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 41 aluminum traders with a total monthly traded volume of nearly 300 kt. These traders are located in Shanghai, Wuxi, Hangzhou, Nanhai, Tianjin and Shenyang.
The SMM China Aluminum Ingot Trade Index – Trader Stock Index rose slightly by 3.8 percentage points to 47.6% this week, but was still below the 50% balance line. Due to capital pressure at month’s/quarter’s end and bearish macro economic environment, downstream processors and middlemen were pessimistic towards future markets, therefore showed little buying interest. Meanwhile, traders were also pessimistic towards future aluminum prices. Though spot aluminum stock generally maintained a balance with rigid aluminum demand, weak aluminum consumption still led to slight increases in traders’ stocks.
The SMM China Aluminum Ingot Trade Index – Aluminum Price Expectation Index further slipped by 3 percentage points this week to 19.5%. Though the dropping trend is slowing, the index itself is already near the threshold. Further more, the bearish attitude towards aluminum price remains strong. At present the bear market has already started, as reflected by continuous plunges in financial markets. Though stock building before the National Day holiday will help boost market confidence to a certain extent, limited demand will not essentially alleviate the prevailing bearish sentiment. Most market respondents expect global aluminum prices to slip with other base metals as the bear market continues before the National Day holiday begins.