SHFE Aluminum Plunges, Spot Discounts Narrow [SMM Spot Aluminum Midday Review]

Published: Feb 25, 2025 13:28 (GMT+8)

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[SMM Midday Review on Spot Aluminum: SHFE Aluminum Plunged, Spot Discounts Narrowed] Aluminum prices pulled back significantly, stimulating downstream purchasing sentiment. Market transactions were relatively active today, and due to the decline in absolute prices, spot discounts are likely to show a slight narrowing trend.

SMM, February 25 - This morning, the center of SHFE aluminum front-month contract quickly pulled back. Downstream purchasing emerged at lower prices, with strong buying sentiment in the market. Specifically, trading activity was active in east China, and spot discounts narrowed by 20 yuan/mt compared to the previous trading day. Today, SMM A00 aluminum ingot was at a discount of 50 yuan/mt against the SHFE 2503 contract, with SMM A00 aluminum ingot prices recorded at 20,390 yuan/mt, down 200 yuan/mt from the previous trading day.

In the central China market, the previous consumption of truck-transported cargoes eased the pressure on station cargoes. After the absolute price dropped today, downstream stockpiling slightly improved, and traders stood firm on quotes. Station cargoes were mostly offered at premiums, and trading activity improved compared to the previous trading day. Spot discounts narrowed, with actual transactions mainly at SMM central China +10 yuan/mt. Today, the Henan-Shanghai price spread was around a discount of 180 yuan/mt. SMM central China A00 aluminum ingot was recorded at 20,260 yuan/mt against the SHFE 2503 contract, down 180 yuan/mt from the previous trading day.

Inventory-wise, according to SMM data on aluminum ingot social inventory in three domestic regions, as of February 25, inventory increased by 6,400 mt to 727,400 mt. The significant pullback in aluminum prices stimulated downstream purchasing sentiment. Market trading was active today, and with the drop in absolute prices, spot discounts are likely to show a slight narrowing trend.

Source: SMM
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