Wuxi Destocking Spot Discounts Narrowed, Futures Pulled Back With Lower Transaction Prices [SMM Spot Aluminum Midday Review]

Published: Jan 23, 2025 13:02

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SMM Spot Aluminum Midday Review: Wuxi Destocking Spot Discounts Narrow, Futures Pull Back with Lower Transaction Prices

SMM, January 23 - In the early trading session, SHFE aluminum front-month contract fluctuated downward, with a significant price decline in the second trading session. Fundamentally, the Wuxi region continued destocking, stimulating suppliers' sentiment to stand firm on quotes. Spot discounts narrowed as the market gradually entered the holiday period, with transactions mainly concentrated among traders. Today, SMM A00 aluminum ingot prices showed a discount of 20 yuan/mt against the SHFE 2502 contract, narrowing by 10 yuan/mt compared to the previous trading day. SMM A00 aluminum ingot prices stood at 20,200 yuan/mt, down by 40 yuan/mt from the previous trading day.

In the central China market, supply and demand both remained weak. After the futures market pulled back, suppliers' sentiment to stand firm on quotes strengthened, with actual transactions mainly showing a premium of 10-30 yuan/mt against SMM central China prices. Today, the Henan-Shanghai price spread was around a discount of 110 yuan/mt. SMM central China A00 aluminum ingot prices recorded 20,090 yuan/mt against the SHFE 2502 contract, down by 20 yuan/mt from the previous trading day.

Regarding inventory, according to SMM domestic aluminum ingot social inventory data, as of January 23, inventory increased by 5,000 mt to 460,000 mt. In the short term, earlier in-transit cargoes gradually entered warehouses, combined with downstream entering the Chinese New Year holiday, leading to a turning point in social inventory. However, Wuxi continued destocking, supporting regional premiums and discounts. Moving forward, attention should be paid to arrivals in east China and changes in downstream demand.

Data source: SMM
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Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

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