Impact from aluminum billet plant explosion has faded, inventory pressure remains enormous

Regarding aluminum billet inventory, after significant build-up during the National Day holiday, inventory slightly fell post-holiday from a relative three-month high, but rebounded this week. According to SMM, on October 26, 2023, domestic aluminum billet inventory stood at 113,600 mt, down 1,300 mt from October 23, but up 6,400 mt from October 19. However, it was still 46,300 mt higher YoY, nearing a three-year high for the period. This week, overall inventory changes in various regions were minimal, with some decline in Changzhou, high inventory in Wuxi, and stability elsewhere. According to SMM's latest weekly survey of leading domestic downstream aluminum processors, the weekly operating rates of aluminum extrusion companies last week was only 58.5%, down from 59.6% two weeks ago. Post-holiday aluminum extrusion demand didn't pick up, leading to severe pressure on aluminum billet social inventory.