Downstream Restocking on Dips, Regional Premiums and Discounts Stabilize [SMM Spot Aluminum Midday Review]

During the early trading session today, the most-traded SHFE aluminum contract opened with a plunge below the daily moving average to around 19,850 yuan/mt, then stabilized and rebounded to around 19,880 yuan/mt, fluctuating in consolidation. By the end of the second session, the futures market dropped again to around 19,830 yuan/mt. Spot premiums in east China gradually stabilized as the futures market declined, but under the backdrop of large traders controlling cash flow and inventory at year-end, premiums remained relatively weak. Today, the SMM A00 aluminum ingot was at a discount of 120 yuan/mt against the SHFE aluminum 2501 contract, down 10 yuan/mt from the previous trading day. SMM A00 aluminum ingot prices stood at 19,680 yuan/mt, down 110 yuan/mt from the previous trading day.

In the central China market, the futures market has seen a significant drop in recent days, leading to a sharp decline in long-term contract demand, with spot transactions dominating. Marketable supply remained tight, and the Henan-Shanghai price spread narrowed to a discount of around 80 yuan/mt. SMM central China A00 aluminum ingot prices were recorded at 19,600 yuan/mt against the SHFE aluminum 2501 contract, down 90 yuan/mt from the previous trading day. Actual market transactions were at a premium of around 20 yuan/mt against SMM central China prices.

Inventory-wise, as of this Thursday, SMM aluminum social warehouse inventory stood at 528,000 mt, down 23,000 mt from Monday. After a significant pullback in aluminum prices, downstream orders increased, and premiums and discounts in many regions stabilized and rebounded. However, the east China market still faced pressure to clear inventory and recover funds, keeping premiums relatively weak.

Source: SMM

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