The Fundamentals of Aluminum Remain Supportive, Expected to Fluctuate at Highs in the Short Term [SMM Spot Aluminum Midday Review]

Published: Mar 13, 2025 14:08

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[SMM Spot Aluminum Midday Review: Aluminum Fundamentals Remain Supportive, Expected to Fluctuate at Highs in the Short Term] Inventory side, according to SMM domestic aluminum ingot social inventory data, as of March 13, aluminum ingot inventory in major domestic consumption areas stood at 862,000 mt, down 6,000 mt from the previous trading day. In the short term, inventory destocking in major consumption areas and optimistic downstream demand expectations provide support for aluminum prices. Coupled with recent downstream purchasing as needed, spot premiums and discounts may fluctuate.

SMM, March 13 - SHFE aluminum fluctuated during the morning session, with the center of the front-month contract hovering at 20,900-21,000 yuan/mt. Bullish sentiment dominated the spot market, as continued destocking of aluminum ingots supported high prices.

Specifically, trading activity was active among traders in east China, but the rapid rise in aluminum prices made it difficult to narrow spot discounts. Today, SMM A00 aluminum ingot was at a discount of 40 yuan/mt against the SHFE 2503 contract, with SMM A00 aluminum ingot prices recorded at 20,910 yuan/mt, up 10 yuan/mt from the previous trading day. In central China, transactions showed no significant improvement today. With downstream safety-related production restrictions lifted, high prices prompted priority consumption of inventories. Transactions in central China were mainly on par with SMM central China prices, with SMM central China A00 aluminum ingot recorded at 20,790 yuan/mt against the SHFE 2503 contract, up 10 yuan/mt from the previous trading day, and the Henan-Shanghai price spread stood at -120 yuan/mt.

In terms of inventory, according to SMM data, domestic social inventory of aluminum ingots in major consumption areas stood at 862,000 mt on March 13, down 6,000 mt from the previous trading day. In the short term, inventory destocking in major consumption areas, coupled with optimistic downstream demand expectations, is expected to support aluminum prices. Considering that downstream purchasing remains primarily on an as-needed basis, spot premiums and discounts may fluctuate.

Data source: SMM
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