Aluminum inventory accumulates, attention to inventory turning point

After Nov 10, concentrated arrivals in Wuxi and Gongyi, combined with declining outflows from warehouses, led to a slight inventory buildup in the domestic aluminum social inventory this week. Since November, outflows from warehouses in major consumption areas have shown a downward trend, with domestic aluminum ingot outflows declining for two consecutive weeks, cumulatively dropping by about 10,000 mt since late October to 112,100 mt. This week, aluminum prices fell back from highs, and downstream bargain hunting improved aluminum outflows from warehouses. However, shipments from Xinjiang remained unsatisfactory, making it unlikely for inventory to see significant increases. As of November 14, 2024, SMM statistics showed domestic aluminum ingot social inventory at 565,000 mt, up 2,000 mt WoW but down 11,000 mt compared to Nov 11, remaining stable overall compared to last week. On YoY terms, current domestic aluminum ingot inventory decreased by 129,000 mt compared to the same period last year. SMM expects that due to the price correction leading to restocking, combined with the fluctuating shipment situation in Xinjiang, domestic aluminum ingot inventory may still see slight destocking in the short term. However, due to the overall decline in outflows during the off-season, the risk of inventory buildup will increase in the latter half of November, with domestic aluminum ingot inventory expected to fluctuate around 550,000-600,000 mt. The timing of the inventory turning point and whether it will enter a continuous buildup phase still require close attention to the downstream consumption situation amid volatile aluminum prices and the smoothness of shipments from major sources.