SMM Analysis of Short-Term Aluminium Market Fundamentals

SHANGHAI, Mar 27 (SMM) – In terms of fundamentals, aluminium smelters in Guizhou and Sichuan continued to resume their production. The operating aluminium capacity in China has recovered to 40.2 million mt, an increase of more than 300,000 mt compared with the beginning of March. However, the daily average output so far this month has not exceeded the level in February. Customs data showed that China’s net imports of primary aluminium reached 146,000 mt in January-February this year. Roughly 50,000-60,000 mt of primary aluminium from Russia is expected to flow into China per month. With imports showing an upward trend, there could be risk of supply shock in the long run. According to SMM survey, the average operating rate of major aluminium processing enterprises rose 0.2 percentage point on a weekly basis to 64.4% last week, which was driven by improving orders in extrusion and cable sectors. Aluminium ingot social inventories declined 85,000 mt on a weekly basis to 1.126 million mt thanks to the recovery of downstream consumption, boosting market confidence.