Since last week, aluminum prices have entered a phase of fluctuating adjustments. In the short term, driven by the "rush to export" by downstream enterprises before December 1, the operating rate of aluminum processing increased slightly this week, effectively boosting restocking activities since mid-November. According to SMM statistics, domestic aluminum ingot outflows from warehouses increased by 7,300 mt WoW to 132,300 mt last week, but this was not enough to prevent the expected inventory buildup. As of November 28, 2024, SMM statistics showed domestic aluminum ingot social inventory at 553,000 mt, with domestic available aluminum inventory at 427,000 mt, an increase of 14,000 mt WoW. Despite continued slight declines in inventory in Foshan and Chongqing, significant inventory buildup occurred in Gongyi and Wuxi, with Xinjiang being the main source. On a YoY basis, current domestic aluminum ingot inventory decreased by 67,000 mt. SMM believes that as the end of November approaches, there are signs of continued alleviation of recent backlogs in Xinjiang. The concentrated arrivals in Gongyi and Wuxi may intensify. Coupled with the limited sustainability of the off-season increase in aluminum ingot outflows from warehouses, SMM expects the inventory inflection point to appear in the next two weeks, with domestic aluminum ingot inventory expected to range around 550,000-650,000 mt. The risk of sustained inventory buildup will significantly increase as outflows from warehouses may slow down or decline.
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