Decline in China's aluminum ingot social stocks far outpaces expectations

On Dec 14, 2023, China's aluminum ingot social stocks fell by 77,000 mt WoW to 483,000 mt, matching last year's same-period levels. Stocks have hit a yearly low since mid-November, a surprising trend. SMM data shows sharp, steady inventory declines in the three major consumption areas, with no sign of change in the ongoing stock depletion amid demand outpacing supply. SMM reports domestic aluminum ingot stocks dropped over 200,000 mt since mid-November, surpassing expectations. December's casting ingot output increase and imports haven't slowed de-stocking, with inventories at an annual low. Current transport volumes remain low in Wuxi and South China, and despite Gongyi's rising transit quantity, large arrivals haven't occurred. SMM predicts domestic aluminum ingot stocks will keep depleting, mainly due to fallout from Yunnan production cuts earlier. The early December rapid stock decline suggests levels might fall to 400,000-450,000 mt by month-end.