During the Week, Section Steel Plants Stockpile Raw Materials as Actual Production Shows Little Improvement in the Short Term [SMM Analysis]

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SMM, January 10

During the week, PV downstream demand remained weak, with insufficient orders for suppliers in the latter part of the chain. Leading suppliers experienced some degree of operating rate adjustments. Additionally, SMM learned that some PV frame suppliers saw an increase in finished product inventories at their plants, while downstream cargo pick-up slowed. Regarding raw material inventories, enterprises in east China restocked at lower prices, supporting destocking in the region. SMM will continue to monitor downstream demand and enterprise holiday schedules.SMM will continue to track these developments.

Raw Material Prices:During the period (2025.01.06-2025.01.10), spot aluminum average prices fluctuated widely. SMM A00 weekly average price was 19,712 yuan/mt, down 86 yuan/mt WoW, a decrease of 0.43%. Overall, on the macro side, mixed signals persisted. The Chinese government continued efforts to boost consumption, while uncertainty over the US Fed's interest rate cut pace increased. Fundamentals side, early January aluminum capacity remained stable, while alumina fundamentals maintained a slight surplus. Spot alumina prices are expected to continue their short-term downward trend, and aluminum industry cost side may keep declining. Demand side, market demand weakened further during the off-season, with operating rates in the aluminum processing industry declining steadily. Some aluminum processing plants are nearing holiday shutdowns. Although pre-holiday concentrated restocking led to better-than-expected inventory destocking, providing short-term support to aluminum prices, the sustainability is expected to be limited. Key focus areas include the impact of spot alumina price pullback on aluminum cost side, as well as downstream holiday schedules and the continuity of pre-holiday restocking pace.

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