The social inventory of aluminum ingots may start to decline slowly, with spot discounts narrowing

On June 6, 2024, SMM reported that the total social inventory of aluminium ingots was 778,000 mt (the amount for sale stood at 652,000 mt), down 12,000 mt from June 3 and 3,000 mt WoW. Two key data need attention: (1) Domestic aluminium ingot inventory was up 225,000 mt YoY, and this gap continues to widen with no signs of narrowing; (2) The inventory gap compared to the same period in 2022 has narrowed by only 75,000 mt to less than 100,000 mt. In the week, domestic aluminium ingot pick-up from warehouses fell below 100,000 mt again, reaching only 97,700 mt, down 4,600 mt WoW, hitting a new low since the Labour Day holiday. It has been at a low level for the same period in the past five years. Despite the continuous accumulation of inventory for more than half a month due to ample supply and weak cargo pick-up, SMM believes that with the full resumption of billet factories in Guangxi in early June, ingot volume is expected to decline. Due to recent slight recovery in downstream delivery, domestic aluminium ingot inventory began to drop. It is expected that domestic aluminium ingot inventory may start to decline slowly, potentially falling back to 700,000 mt by the end of June.