Aluminum billets conversion margins rebounded due to expanding spot discounts of aluminum prices

The performance of aluminum billets outflow from warehouses was moderate as high aluminum prices supressed downstream demand. However, except for the east China, the arrivals of aluminum billets in south China continued to decline in the week, contributing to further inventory decline. According to SMM statistics, the domestic social inventory of aluminium billets on Mar 28 was 231,300 mt, down 4,500 mt from Mar 25, and down 6,800 mt or 2.9% WoW. The inventory has declined for four consecutive weeks, with a total decrease of 45,100 mt. The inventory in major domestic consumption areas diverged in the week. Except for Foshan, Wuxi, and Huzhou where inventory continued to decline, inventories in Changzhou and Nanchang experienced a significant accumulation after concentrated arrivals. The outflow of aluminum billets from warehouses in the fifth week after CNY holiday was 52,800 mt, up 2,600 mt WoW.

Aluminum billets conversion margins rebounded due to large spot discounts of aluminum prices. φ120 and φ90 aluminum billets conversion margins in south China were quoted at 280 yuan/mt and 330 yuan/mt, up 130 yuan/mt and 120 yuan/mt WoW. Manufacturers still held back from selling in north China, and sell-off weakened in south-west China, mainly Guangxi and Guizhou. In Wuxi, φ120 and φ90 aluminum billets conversion margins were quoted at 330 yuan/mt and 400 yuan/mt, up 130 yuan/mt and 150 yuan/mt WoW. Conversion margins in Nanchang were 260 yuan/mt and 360 yuan/mt, up 80 yuan/mt and 130 yuan/mt. The inventory growth suppressed the rebound in processing fees of certain specifications of aluminium billets.