The most-traded SHFE aluminum contracts fluctuated upwards and then fell back. As CNY approaches, demand weakened amid sluggish transactions.

In early trading today, the most-traded SHFE aluminum contracts fluctuated upward and then fell back. Today, trading volume in east China was relatively light. As CNY approaches, the downstream industries gradually began to suspend production and took holidays. The demand weakened, with stocking mainly for urgent needs, and transactions were moderate. According to SMM statistics, today's aluminum ingot inventory in Wuxi (excluding Hangzhou, Changzhou, Haian and other places) was 106,300 mt, a decrease of 1,400 mt from the previous trading day. The recent arrival has been slightly unsmooth, and the import window temporarily closed. Spot supply was slightly tight. Today's SMM A00 aluminum price narrowed to about flat against the 2402 contract, up 20 yuan/mt from the previous trading day. The spot price was recorded at 18,770 yuan/mt, down 180 yuan/mt from the previous trading day. During the second trading session, the market was dominated by downward movement. Today's mainstream transactions in east China have a discount of 20 yuan/mt to a premium of about 10 yuan/mt for SMMA00 aluminum price.

Spot transactions in the central China were relatively sluggish today. According to SMM statistics, the aluminum ingot inventory in Gongyi today was about 76,100 mt, an increase of 2,200 mt from the previous trading day. Due to heavy snowfall, truck transportation in the central China has been affected, and the arrival of aluminum ingots has been blocked. The flow of supply has tightened, which is good for central China's spot premium and discount. The spot discount continued to narrow. Today's SMM central China price has a discount of about 60 yuan/mt to the 2402 contract, up 20 yuan/mt. The average spot price recorded 18,710 yuan/mt. The mainstream spot transaction in early trading had a discount of 10 yuan/mt against the original price of SMM to a premium of about 20 yuan/mt.

Overall, with the further shutdown of downstream plants for upcoming CNY holiday, aluminum ingots accumulated a significant amount of inventory as of last Thursday, with an accumulation of 35,000 mt compared with the previous week. However, the arrival of goods has been hampered recently due to weather conditions. SMM statistics showed that the national aluminum ingot inventory on Monday was 475,000 mt, 3,000 mt more than last Thursday, and the accumulation rate was relatively slow. Fundamentally, as CNY approaching, the operating of downstream processing enterprises weakened, spot market demand declined, and the proportion of ingots in the industry gradually increased. Aluminum social inventories may grow, but transportation may be affected due to weather conditions, which may drag down the stockpiling. SMM expects that the spot premiums may be under pressure.