Watch Out for Restarts at Aluminum Smelters in China, SMM Warns

[SMM Aluminum Alloy Daily Review] The most-traded cast aluminum alloy 2611 contract opened at 23,855 yuan/mt today, shot up to an intraday high of 23,930 yuan/mt before momentum faded, then consolidated and pulled back, dipping to an intraday low of 23,795 yuan/mt before midday, and closed at 23,810 yuan/mt. It fell 65 yuan, or 0.27%, from the night session closing price, and rose a cumulative 0.08% from yesterday's settlement price.

Expectations for the September peak season diverged from the sluggish reality. With aluminum prices remaining high, downstream processing enterprises in central China continued to procure only small volumes as needed, stockpiling cautiously and focusing on reducing in-factory inventory. Only trading firms engaging in both spot and futures market made large purchases, while major suppliers showed limited willingness to sell due to the deep discount. Ultimately, actual transaction prices in the central China market ranged from a discount of 150-180 yuan/mt against the 09 contract.

[SMM Aluminum Alloy Flash] China's social inventory of cast aluminum alloy ingots recorded 34,100 mt this week, up 1,100 mt WoW, marking the fifth consecutive week of inventory buildup. The traditional peak consumption season is gradually kicking off, but end-use demand improvement remains limited, with downstream purchases still mainly need-based and inventory digestion relatively slow. Meanwhile, purchases by some futures and spot traders and trade links continue to provide some support to social inventory. In the short term, as demand from the September peak season is gradually released, the pace of social inventory buildup may narrow, but the inventory inflection point still awaits further demand realization.