Suppliers Show Strong Willingness to Sell, Spot Premiums Under Pressure and Declining [SMM Spot Aluminum Midday Review]

Overnight, the SHFE aluminum front-month contract rose above 20,700 yuan/mt. Although the center slightly shifted downward during the morning session, it mainly fluctuated around the high level of 20,650 yuan/mt. In the east China market, suppliers previously held back cargoes, but due to the futures market remaining at high levels, financial pressure and profit-driven motives increased their willingness to sell. Spot premiums came under pressure and declined, with transactions against the SMM A00 spot price at a discount of 10 yuan/mt. The SMM A00 price against the SHFE 2503 contract recorded a discount of 40 yuan/mt, down 10 yuan/mt from the previous trading day. SMM A00 aluminum ingot prices stood at 20,600 yuan/mt, down 30 yuan/mt from the previous trading day.

In the central China market, suppliers were highly active in selling during the morning session. However, with the futures market at high levels, downstream buying sentiment remained weak, leading to a collapse in spot premiums. The SMM central China A00 price against the SHFE 2503 contract recorded 20,490 yuan/mt, down 50 yuan/mt from the previous trading day. The Henan-Shanghai price spread stood at -110 yuan/mt, with actual market transactions at a discount of around 10 yuan/mt against the SMM central China price.

Inventory-wise, the SMM daily aluminum social inventory recorded 747,900 mt, with an inventory buildup of 2,800 mt. Previously, as aluminum prices shifted downward, most suppliers held back cargoes. With the slight rebound in aluminum price centers, suppliers across regions became more active in selling. However, the high absolute price levels continued to suppress downstream consumption, and spot premiums are expected to rebound slowly.

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