The outflow of aluminum billets from warehouses dropped. However, due to the significant decline in the arrivals, the inventory decline continued and accelerated in the week. According to SMM statistics, the domestic social inventory of aluminium billets on Mar 21 was 238,100 mt, down 11,600 mt from Mar 18, and down 20,100 mt or 7.8% WoW. The inventory has declined for four consecutive weeks, with a total decrease of 38,300 mt. The outflow from warehouses in the fourth week after CNY holiday was 50,200 mt, down 5,700 mt
Inventory decline accelerated as some producers sold at close to costs in order to promote sales. As aluminum prices reached 19,300 yuan/mt, the conversion margins fell. φ120 and φ90 aluminum billets conversion margins in south China were quoted at 150 yuan/mt and 210 yuan/mt, down 50 yuan/mt and 70 yuan/mt WoW. The supply in the north China was low, causing manufacturers to hold back from selling, but the quotes for supply in the southwest China, mainly Guangxi and Guizhou dropped and shipments rose, suppressing market prices. In Wuxi, φ120 and φ90 aluminum billets conversion margins were quoted at 200 and 250 yuan/mt, down 60 yuan/mt WoW. Conversion margins in Nanchang were 180 and 230 yuan/mt, down 40 and 50 yuan/mt. The wait-and-see sentiment in the market intensified, and the overall transaction was poor. According to SMM research, the poor performance of conversion margins also suppressed the recent increase in aluminum scrap and re-melting billet prices.
