This morning, the SHFE aluminum front-month contract center fluctuated rangebound, declining to around 20,170 yuan/mt. The east China market was almost entirely immersed in the holiday atmosphere, with sluggish market trading and a frozen trading sentiment, making transactions difficult. The SMM A00 spot price was on par with the SHFE aluminum 2502 contract at a discount of 20 yuan/mt, unchanged from the previous trading day. SMM A00 aluminum ingot prices recorded 20,120 yuan/mt, down 70 yuan/mt from the previous trading day.
In the central China market, although environmental protection measures in Gongyi were fully lifted over the weekend and large downstream processing plants resumed full casting and rolling operations, the upcoming Chinese New Year led to a significant decline in pre-holiday stocking demand on the last trading day before the holiday. Market trading turned sluggish. Today, the Henan-Shanghai price spread recorded a discount of 100 yuan/mt, widening by 10 yuan/mt from the previous trading day. The SMM central China A00 price against the SHFE aluminum 2501 contract recorded 20,020 yuan/mt, down 80 yuan/mt from the previous trading day, with actual market transactions at around SMM central China -10 to on par with yuan/mt.
Inventory-wise, SMM's mainstream aluminum consumption regions recorded a weekly inventory of 492,000 mt, with an inventory buildup of 32,000 mt. The turning point for social inventory buildup has arrived, but the total inventory remains at a relatively low level. Attention should be paid to inventory changes during the Chinese New Year, which may fall short of market expectations, limiting the room for seasonal spot market discounts to widen.
Data Source: SMM
