Macro Bearish Factors Cause SHFE Aluminum to Pull Back; Spot Market Transactions Active [SMM Spot Aluminum Midday Review]

Published: Mar 11, 2025 13:41

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[SMM Spot Aluminum Midday Review: Macro Bearish Factors Pull Back SHFE Aluminum, Spot Market Transactions Active] Inventory side, according to SMM data on social inventories of aluminum ingots in three major domestic regions, aluminum ingot inventory in China's major consumption areas stood at 726,000 mt on March 11, with an inventory buildup of 800 mt compared to the previous trading day. In the short term, inventories in major consumption areas show slight fluctuations, but downstream demand is expected to improve, providing support for aluminum prices. Coupled with the fact that downstream purchasing remains primarily as needed recently, spot premiums and discounts may fluctuate.

SMM March 11—

Affected by macro bearish factors, base metal funds saw risk aversion and reduced positions today, with the center of SHFE aluminum front-month contract quickly moving downward during the morning session. After the futures market pulled back, spot trading became active, with buyers purchasing as needed at lower prices, while suppliers slightly stood firm on quotes when selling.

Specifically, trading activity was brisk among traders in east China, and spot discounts narrowed by 10 yuan/mt compared to the previous trading day. Today, SMM A00 aluminum recorded a discount of 40 yuan/mt against the SHFE 2503 contract, with SMM A00 aluminum ingot priced at 20,710 yuan/mt, down 60 yuan/mt from the previous trading day. In the central China market, transactions slightly improved today, with active trading among traders, but actual downstream demand showed no improvement. SMM also learned that inventories at nearby aluminum processing plants remained high, coupled with the impact of safety-related production restrictions, leading downstream buyers to prioritize inventory digestion. Transactions in central China today were mainly at a premium of 10 yuan/mt against SMM central China prices, with SMM central China A00 aluminum recorded at 20,600 yuan/mt, down 40 yuan/mt from the previous trading day, and the Henan-Shanghai price spread remained at -110 yuan/mt.

In terms of inventory, according to SMM data on aluminum ingot social inventories in three domestic regions, aluminum ingot inventories in major domestic consumption areas stood at 726,000 mt on March 11, with an inventory buildup of 800 mt compared to the previous trading day. In the short term, inventories in major consumption areas showed slight fluctuations, but downstream demand is expected to improve, providing support for aluminum prices. Combined with recent downstream purchasing as needed, spot premiums and discounts may fluctuate.

Source: SMM

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