Spot Market Transactions Driven by Rigid Demand, Premiums Struggle to Rise [SMM Spot Aluminum Midday Review]

This morning, the SHFE aluminum front-month contract fluctuated at highs near 20,650 yuan/mt above the daily moving average, with its center almost continuously moving upward. In the east China market, spot trades saw a decline in activity during the day, focusing on just-in-time procurement by downstream buyers, while spot premiums struggled to rise. The SMM A00 spot price stood at a discount of 30 yuan/mt against the SHFE aluminum 2503 contract, unchanged from the previous trading day, with SMM A00 aluminum ingot prices recorded at 20,630 yuan/mt, up 30 yuan/mt from the previous trading day.

In the central China market, part of the inventory was hedged, leading to a low circulation rate. With recent improvements in outflows from warehouses, traders seized the opportunity to stand firm on quotes, though actual downstream consumption showed little improvement compared to the previous trading day. The SMM central China A00 price stood at 20,540 yuan/mt against the SHFE aluminum 2503 contract, up 40 yuan/mt from the previous trading day, with the Henan-east China price spread at 90 yuan/mt. Actual market transactions were conducted at a premium of around 10 yuan/mt against the SMM central China price.

Inventory-wise, the SMM weekly aluminum social inventory was recorded at 886,000 mt, with an inventory buildup of 13,000 mt. Following the earlier downward shift in aluminum price centers, outflows from warehouses improved across regions, and spot premiums showed steady improvement. Entering March, with the anticipated inventory turning point expected in mid-March, spot premiums are projected to trend upward overall.

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