The most active SHFE aluminium contract inched lower between February 11 and March 9, with the low-end of 18,285 yuan/mt and the high-end of 18,930 yuan/mt. As of March 9, the contract closed at 18,495 yuan/mt, down 135 yuan/mt or 0.72%. LME three-month copper contract prices were on the decline during the same period, moving between $2,321-2,485/mt. As of 15:00 CST March 9, LME copper prices finished at $2,344.5/mt, a decline of of 5.4%.

Aluminium ingot inventories were accumulating at the beginning of February. Meanwhile, aluminium costs declined due to lower coal prices. Aluminium prices thus plunged to around 18,600 yuan/mt and moved in a narrow range. The output cuts in Yunnan in late February pushed up aluminium prices to around 18,800 yuan/mt, but the output cuts were not reflected in the inventory data. The market supply remained ample and downstream demand did not recover substantially. As of March 9, SHFE aluminium prices closed at 18,495 yuan/mt. In China’s domestic spot market, spot discounts shrank at the start of the month when SHFE aluminium prices tumbled. Trades were subdued after delivery of the SHFE front-month contract, widening spot discounts of SMMA00 aluminium ingot to 110 yuan/mt against SHFE 2302 aluminium contract. Purchases increased in early March in anticipation of narrower spot discounts with the delivery approaching. The discounts gradually narrowed to 50 yuan/mt.