East China spot aluminium flipped into discounts as imports improved availability

SHANGHAI, Jun 9 (SMM) – Spot prices of aluminium ingots in east China flipped into wide discounts against futures on Tuesday, as futures extended their rally and the influx of foreign cargoes boosted eased tightness in availability.

Discounts in Shanghai and Wuxi fell to 100-60 yuan/mt over the front-month aluminium contract on the Shanghai Futures Exchange, from 60-40 yuan/mt earlier in morning trade as the contract for June delivery pulled back after jumping about 2% to its highest since January 23 at 13,910 yuan/mt.

Sellers were keen to discharge their cargoes on expectations of deeper discounts, while buyers were cautious.

Imported aluminium that arrived at east and south China of late was quoted 30-50 yuan/mt lower than common domestic products, improving availability and weighing on spot prices.

SMM data showed that social inventories of primary aluminium ingots in China continued to trend lower over the weekend, propelled by stable demand and limited arrivals at some hubs.

Social inventories of primary aluminium ingots across eight consumption areas in China, including SHFE warrants, decreased 46,000 mt from last Thursday June 4 to 801,000 mt as of Monday June 8.