SHANGHAI, May 30 (SMM) –Aluminum stocks in China’s five major markets fell significantly last week the decline was much sharper than expected. Does this mean a turning point has emerged?
The answer is no, SMM says. In fact, stocks will continue falling, though at a slower pace because fewer goods will be transferred from east China to south China once the price spread between the two regions narrows, SMM explains.
Downstream consumption picked up after aluminum prices fell, the main reason behind inventory declines.
Premiums in Guangdong over Shanghai expanded to over 200 yuan per tonne, luring traders to ship goods aggressively to Guangdong, leading to marked fall in Shanghai.
Stocks in Nanhai, instead of growing, actually fell. This is because many aluminum ingots were shipped directly to local aluminum processing plants, SMM noted.
The table below shows details of aluminum stocks at China’s five major markets:
Unit: 1,000 tonne
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