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On August 8, 2024, SMM reported that the total social inventory of aluminium ingots was 829,000 mt, with a domestic circulating inventory of 703,000 mt. This represents a decrease of 1,000 mt from Monday and an increase of 15,000 mt from August 1, 318,000 mt higher YoY. Pick-up from warehouses decreased by 6,100 mt to 104,400 mt WoW, but mid-week saw a slight rebound in pick-up from major consumption areas. SMM believes that as we approach mid-August, there is a stabilizing and warming trend in consumption and demand compared to July. The slight mid-week destocking sends a positive signal, and the market is eagerly awaiting a clear destocking turning point. According to the SMM survey, although the increase in casting ingot production in Yunnan is significant after full resumption, the impact on the South China market has recently weakened due to the diversion of some Yunnan aluminium ingots to the Southwest market. Overall, August is expected to see a rise in the operating rate of intermediate products like aluminum billets due to the upcoming traditional peak season ("Golden September and Silver October") and the recent significant price correction, with downstream demand showing slight improvement. The proportion of liquid aluminum is expected to rise to around 73%, while casting ingot production is expected to decline. SMM forecasts that domestic aluminium ingot inventory will range between 780,000-850,000 mt in August, with the market needing to wait for clearer signals of a destocking turning point.
For queries, please contact William Gu at williamgu@smm.cn
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