In terms of fundamentals, most domestic aluminium smelters kept operating rate stable during the National Day holiday. There were pre-holiday rumours that aluminium production reduction for Q4 may appear again in Yunnan. According to SMM research so far, operating rate of aluminium smelters largely stood normal with a lack of clear documents on production cuts and halts, and future production will still depend on power supply. Currently, the total operating capacity of domestic aluminium was about 42.94 million mt. Domestic aluminium production is expected to increase by 5.2% year-on-year to around 3.53 million mt in September and is unlikely to mount sharply in October. In downstream sectors, according to SMM's pre-holiday survey, the domestic downstream sectors had different holiday arrangements for the holidays under the sway of orders and other reasons. Most sectors maintained normal production within the National Day holiday. Aluminium plate/sheet, strip and foil producers kept operating rate unchanged, while aluminium extrusion and secondary aluminium alloy producers mainly took a holiday. High domestic aluminium prices still made downstream buyers jittery, and most of them aimed to meet rigid demand ahead of the holiday. Aluminium makers said that upstream sectors were able to witness normal shipments during the National Day holiday, so replenishing demand from downstream buyers appeared sluggish.
Normal transportation of domestic aluminium ingots and billets unfolded during the holiday, while post-holiday build-up of aluminium social inventory occurred. According to SMM data, inventory of aluminium ingots after the holiday was 582,000 mt, up 86,000 mt from pre-holiday level, far higher than the same period in previous years. Among them, the increase in aluminium ingots in Wuxi ranked the first, largely pinned on the early transfer of aluminium ingots from South China and other places and arrivals coming from regular shipments.
In addition, inventory of aluminium billets after the holiday was 103,700 mt, up 34,000 mt from pre-holiday level, of which aluminium billet arrivals in Foshan increased significantly. The total inventory of aluminium ingots and billets hiked by 120,000 mt compared with before the holiday, higher than the same period in previous years.
