Aluminum Billet Inventory Slightly Destocked During the Week, Processing Fees Rose, and Market Transactions Slightly Improved [SMM Aluminum Billet Weekly Review]

SMM, February 27:

According to the latest data from SMM, as of February 27, 2025, domestic aluminum billet social inventory decreased to 312,700 mt mid-week after surpassing the 320,000 mt threshold, down 8,000 mt from Monday but up 89,100 mt compared to pre-holiday levels (January 27). While inventory showed upward momentum after breaking the 300,000 mt mark, the pace of increase has noticeably slowed. Notably, post-Lantern Festival, accelerated resumption of operations at downstream extrusion plants drove a rebound in outflows from warehouses. Last week's outflows reached 51,500 mt (up 7,300 mt WoW), setting a new high for the year. Although there are suspicions of aluminum billet manufacturers offering volume discounts, this still reflects a certain degree of end-user restocking demand. Based on the inventory trends observed over the past seven years following the Chinese New Year, SMM predicts that the destocking turning point for aluminum billets is likely to appear earlier than that for aluminum ingots, with the inventory turning point expected to emerge by late February or early March. The forecast for the Q1 aluminum billet inventory peak remains around 350,000 mt.

Regarding aluminum billet processing fees, this week saw mixed macroeconomic signals. Post-holiday, the SHFE aluminum center continued to rise, with aluminum prices entering a consolidation phase mid-week. The short-term stabilization of aluminum prices supported suppliers in raising aluminum billet processing fees. However, downstream sentiment remained cautious, with bargain down purchasing prices prevailing, leading to moderate market transactions. Regionally, the Foshan market saw slightly improved shipments compared to last week, with Foshan aluminum billet prices quoted at 160-210 yuan/mt, up 40 yuan/mt from last Thursday. In east China, rigid demand from extrusion enterprises was notable, stabilizing local inventory. Wuxi aluminum billet prices were quoted at 180-230 yuan/mt, up 50 yuan/mt from last Thursday. In Nanchang, price quotes varied, and trading activity was relatively slow, with local aluminum billet prices at 180-230 yuan/mt, unchanged from last Thursday.

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