SHANGHAI, Dec 2 (SMM) - The stocks of aluminium billet in five major consumption areas dropped 7,200 mt to 71,700 mt on December 2 from a week ago, a decrease of 9.14%. And the inventory has been falling for seven straight weeks.
Foshan was still the largest contributor to the falling social inventory, and the local inventory dropped 6,400 mt or 21.05% on the week. The inventories in Wuxi and Changzhou also declined, while Huzhou and Nanchang both saw slightly rising inventories. The declines of weekly social inventory was still caused by the falling arrivals for aluminium billet.
Looking forward, the downstream sectors of aluminium billet became less interest in purchasing, and some of them turned to aluminium ingot as the conversion margin of aluminium billet was high compared with the re-smelting costs. Meanwhile, the warehouses reported that the transportation in north-west China is still disrupted. Hence the social inventory will keep falling but at a much slower pace, and there is also possibility that the inventory would rise on the week.