SHANGHAI, Aug 4 (SMM) – SMM data showed aluminium ingot social stocks in China’s eight major markets totalled 525,000 mt as of August 3, down 11,000 mt from a week ago, and was 153,000 mt less than a year ago, still a five-year low compared to the same period of previous years.
Entering August, cargo arrivals in major markets were still lower than expected and decreased considerably compared to late July, while cargo pick-up from warehouses were basically stable, allowing stocks to drop. The inventory decline, led by Gongyi, was mainly attributed to three factors. Firstly, many buyers in East China received cargoes directly from smelters rather than picking them up from social warehouses. Secondly, flooding in Tianjin and Gongyi, as well as railway issues in North west China, disrupted cargo arrivals. Thirdly, downstream demand in South China improved slightly. Cargoes arriving in Wuxi fell sharply in the middle of the week. Gongyi drew close market attention as impeded cargo arrivals encountered demand recovery. Downstream demand may pick up a little in August and we will keep a close eye on orders at downstream enterprises and their stock replenishment. Meanwhile, we will also closely watch any change in the supply side, such as smelters adjustment of their share of liquid aluminium output and operating rates.
