Aluminum Inventory Surges by 55,000 mt, Spot Discounts Pattern Remains Unchanged [SMM Spot Aluminum Midday Review]

This morning, the center of the most-traded SHFE aluminum contract gradually shifted slightly downward, fluctuating near 20,550 yuan/mt. In the east China market, aluminum prices rose to high levels, leading to weaker restocking sentiment among downstream buyers, with most transactions driven by rigid demand. However, the price spread between the current-month and next-month SHFE aluminum contracts fluctuated between C10 and B10 during the morning session. Traders mainly stood firm on quotes, leaving limited room for spot premiums to decline. The SMM A00 spot price was at a discount of 50 yuan/mt to the SHFE aluminum 2502 contract, down 10 yuan/mt from the previous trading day. SMM A00 aluminum ingot prices were recorded at 20,540 yuan/mt, down 60 yuan/mt from the previous trading day.

In the central China market, absolute price levels similarly impacted transactions, with downstream buyers mostly engaging in rigid demand-driven purchases. Recently, as aluminum prices reached high levels, end-user enterprises showed reduced consumption capacity, and shipments from downstream aluminum processing enterprises declined significantly. Consequently, under the pace of resumption of work and production, the turnover days of raw material inventories at aluminum processing enterprises showed no growth. The SMM central China A00 price was recorded at 20,410 yuan/mt, a decrease of 70 yuan/mt from the previous trading day, with actual market transactions at SMM central China minus 10 yuan/mt.

Regarding inventory, the weekly inventory in major aluminum consumption regions tracked by SMM was recorded at 818,000 mt, with an inventory buildup of 55,000 mt, marking an expanded increase. Spot premiums faced resistance as inventory levels rose. Downstream consumption in aluminum processing has not yet recovered, and combined with high aluminum prices, the spot market remained in a continuous inventory buildup phase. After the contract rollover, close attention should be paid to changes in the price spread. Under the oversupply situation, the spot market is expected to remain in a discount state in the short term.

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