Aluminum prices fell back from high levels, and spot aluminum rod market transactions improved [SMM analysis]

In terms of aluminum rods, the average ex-factory price of 1A60 general aluminum rods in Shandong was 350 yuan/ton; the processing fee of 1A60 aluminum rods in Henan was 350-400 yuan/ton, and now it is 400 yuan/ton; the processing fee of 1A60 aluminum rods in Inner Mongolia was 150-250 yuan/ton, and now it is 250 yuan/ton; the average processing fee of general rods in South China was 500 yuan/ton. Aluminum prices have been strong since March, and finally the aluminum prices pulled back from a high level. Downstream companies chose to replenish stocks in a concentrated manner, and the transaction sentiment in the aluminum rod market improved significantly. At the same time, there is an upward trend in the processing fee of aluminum rods, and leading aluminum rod companies are willing to maintain prices. However, affected by the poor shipments, there are still low-priced goods on the market that affect the actual market transactions, and the processing fees failed to return to the peak season range. According to the performance of State Grid's orders, April to June are all in a period of intense delivery, and the operating rate of downstream aluminum cable companies may remain high. Supported by downstream demand, it is expected that the aluminum rod processing fees will steadily increase.
Last week, the operating rate of leading aluminum cable companies increased by 2.4 percentage points to 64.2%. Aluminum prices fell from their highs during the week, rebounded slightly after hitting bottom, and market trading sentiment cooled slightly. At the same time, downstream aluminum cable companies seized the opportunity to replenish stocks, and the transaction sentiment in the aluminum rod market in Hebei and Jiangsu improved. However, the market were cautious on purchasing. Companies have to accept high aluminum prices under the pressure of orders and purchase raw materials to meet normal production and delivery. April is now more than halfway through. Due to the strong performance of aluminum prices, the production enthusiasm of enterprises has been suppressed. Now that aluminum prices pulled back, driven by the pressure of order delivery, enterprises concentrated on increasing their operating rates to meet the demand for picking up goods. Considering the delivery of State Grid orders and the production schedule of enterprises, it is expected that the overall industry operating rate will show an upward trend in April.