SHANGHAI, Jul 3 (SMM) – A low consumption season in July-August and falling alumina prices are likely to continue to weigh on Shanghai aluminium prices in the short term, SMM believes.
The most active August aluminium contract on the Shanghai Futures Exchange posted a three-day losing streak as of Tuesday July 2, despite a trade truce between the US and China over the weekend.
SMM learned that manufacturers of aluminium extrusions and rolled products received fewer orders for July, a likely reflection of the advent of a low season.
A slowdown in inventory destocking also pointed to weaker consumption. SMM data showed that social inventories of primary aluminium ingots across major consumption regions in China fell 10,000 mt from Thursday June 27 to stand at 1.041 million mt as of Monday July 1, smaller than a drop of 20,000 mt in the prior weekend between June 20-24.
Alumina prices are unlikely to sharply pick up in July.