As destocking boosted market confidence after the holiday, spot prices stabilized

On June 20, 2024, SMM reported that the total social inventory of aluminum ingots was 756,000 mt, (the amount for sale stood at 629,000 mt), down 25,000 mt WoW and down 13,000 mt from Jun 17, but still nearly 250,000 mt higher YoY. In terms of pick-up from warehouses, due to Dragon Boat Festival holiday, last week's domestic aluminum ingot pick-up from warehouses decreased by 18,600 mt WoW to 99,700 mt. SMM believes that the post-holiday destocking effectively boosted market confidence, which is beneficial for stabilizing spot prices. Although recent cargo pick-up and YoY change in inventory are still less than satisfactory, the market's acceptance of the adjusted aluminum price levels has improved, and downstream willingness to restock at low prices increased, somehow stimulating market demand. During the week, aluminum ingot pick-up in south China increased by over 10,000 mt WoW, with Wuxi also seeing an increase of nearly 7,000 mt, and central China showing positive feedback as well. Regarding arrivals, although the market believes that the short-term decline in aluminum prices may slow down the shipment of aluminum plants, the current shipment of domestic aluminum plants remains at normal levels, and the recent arrivals in major domestic consumption areas stabilized. SMM expects that by the end of June, domestic aluminum ingot inventory is likely to fall back to 700,000 mt.