Aluminum: Mid-week inventory broke below the 800,000 mt mark, post-destocking period's spot performance worth anticipating

After the inventory turning point appeared, mid-week inventory finally broke below the 800,000 mt mark, with accelerated destocking in August effectively boosting market confidence. According to SMM statistics, as of September 5, 2024, the total social inventory of aluminum ingots was 794,000 mt, with domestic circulating aluminum inventory at 668,000 mt, down 17,000 mt WoW but up 277,000 mt YoY. In terms of outflows from warehouses, last week's outflows decreased by 900 mt to 102,800 mt WoW. However, with further aluminum price adjustments and market confidence recovery, outflows are expected to rise significantly this week. With the arrival of the traditional "September-October peak season," downstream processing sectors have reported positive news, with demand showing slight improvement, potentially driving up the operating rate of intermediate products like aluminum billets. The proportion of aluminum liquid is expected to rebound to around 74% in September, with casting ingot production likely to decrease further. As supply-side pressure continues to be released, demand-side improvements in aluminum plate/sheet, strip and foil, and industrial extrusion are gradually emerging from the off-season, providing early support for aluminum ingot consumption and spot premiums/discounts. The post-destocking period's spot performance is worth anticipating. SMM expects domestic aluminum ingot inventory to fall below 800,000 mt in September, operating within the 700,000-800,000 mt range, with overall inventory expected to drop below the safe threshold of 750,000 mt in September.