SHFE Aluminum Jumped Initially and Then Pulled Back in the Morning Session, Spot Aluminum Prices Remained Stable [SMM Spot Aluminum Midday Review]

SMM, March 14

— In the early trading session today, SHFE aluminum briefly touched 21,000 yuan/mt before pulling back to consolidate around 20,900 yuan/mt. After the price pullback, market transactions slightly improved compared to earlier in the morning but remained primarily concentrated among traders. Downstream players mainly focused on purchasing as needed and digesting inventory.

Specifically, trading activity among traders in east China was active. However, due to high aluminum prices, transactions were mostly concluded at SMM A00 average price minus 10 yuan. 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, flat from the previous trading day. In central China, transactions were moderate today. With high downstream inventory levels, enterprises require time to destock, resulting in slower purchasing activity. Transactions in central China were mainly concluded at SMM Central A00 minus 10 yuan, with SMM Central A00 aluminum ingot at 20,780 yuan/mt, down 10 yuan/mt from the previous trading day. The price spread between Henan and Shanghai stood at -130 yuan/mt.

Inventory-wise, according to SMM data on aluminum ingot social inventory across three domestic regions, aluminum ingot inventory in major domestic consumption areas stood at 717,800 mt on March 14, down 4,000 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 downstream players still purchasing as needed, spot premiums and discounts are expected to fluctuate.

Source: SMM

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