Futures Market Surged, Spot Premiums' Firm Quotes Hindered [SMM Spot Aluminum Midday Review]

SMM March 27 News

In the early session today, the futures market surged rapidly and maintained high volatility due to significant destocking of domestic aluminum ingot inventory. In the spot market, sentiment turned cautious amid high prices, with transactions mainly at the average market price.

Specifically, traders in east China stood firm on quotes, with SMM A00 aluminum ingot offered at parity and +10 yuan/mt, with most transactions at parity. Today, SMM A00 aluminum ingot was at a discount of 10 yuan/mt against the SHFE aluminum 2504 contract, recording 20,810 yuan/mt, up 140 yuan/mt from the previous trading day. In central China, the market was sluggish due to the surge in futures, with transactions ranging from -20 to parity. SMM A00 aluminum ingot in central China recorded 20,710 yuan/mt against the SHFE aluminum 2504 contract, up 140 yuan/mt from the previous trading day, with the price spread between Henan and Shanghai at -100 yuan/mt.

Inventory-wise, according to SMM's domestic aluminum ingot social inventory data, on March 27, the inventory of aluminum ingots in mainstream consumption areas in China was 802,000 mt, down 25,000 mt from the previous trading day. In the short term, with the peak season and the growing trend of aluminum use in new energy, social inventory is expected to continue destocking. Additionally, arrivals in mainstream consumption areas such as Wuxi are relatively low, providing support for aluminum prices. However, due to downstream caution over high prices, the narrowing of premiums and discounts is relatively slow.

Data source: SMM

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