Approaching the end of March, domestic aluminum ingot inventory plummeted by 25,000 mt mid-week, nearing the 800,000 mt mark. According to SMM statistics, on March 27, the inventory of aluminum ingots in major domestic consumption areas was 802,000 mt, with 676,000 mt being tradable inventory, a decrease of 25,000 mt from Monday and 32,000 mt WoW from last Thursday. This phenomenon was mainly attributed to the steady increase in outflows from warehouses, with outflows from major consumption areas reaching 128,400 mt over the past week, up 1,300 mt WoW, and weekly outflows maintaining around 130,000 mt since March.
SMM learned that due to increased demand from the automotive and PV sectors in east China, restocking demand rose significantly this week, leading to a sharp decrease of 13,000 mt in Wuxi's inventory mid-week. Although procurement in Gongyi remained primarily driven by rigid demand, supply and demand conditions improved this week, with inventory decreasing by 7,000 mt mid-week. The rapid consumption of inventory was closely related to the reduction in in-transit and arrival volumes: arrivals in Wuxi decreased by over 10,000 mt this week, while Foshan and Gongyi remained relatively stable. Additionally, approaching holidays such as Qingming Festival, reduced transportation capacity led to a short-term increase in transportation costs, especially with a decline in trucking volumes in Yunnan and Guangxi, which facilitated the consumption of warehouse stocks. SMM expects that domestic aluminum ingot inventory will continue its destocking trend in the first half of April, potentially pulling back to around 750,000 mt by mid-April.
In the spot aluminum market, purchasing as needed remained the main trend this week, with some leading enterprises stockpiling mid-week. The discount in east China narrowed, primarily due to continued destocking and reduced arrivals in Wuxi, coupled with strong demand for aluminum from downstream PV and NEV sectors. As of Thursday, the discount of SMM A00 spot prices against the April contract was 10 yuan/mt, narrowing by 30 yuan/mt WoW from last Thursday. Trading in central China was moderate, with aluminum prices rising today and market sentiment cautious. As of Thursday, the discount of SMM Central China A00 against the April contract was 110 yuan/mt, narrowing by 40 yuan/mt WoW from last Thursday. In south China, the discount narrowed early in the week due to monthly long-term contract delivery needs, but demand weakened later, and suppliers' desire to recoup funds by month-end led to relatively ample market circulation. The overall market performance was stable this week, with the discount narrowing by 10 yuan/mt to 35 yuan/mt WoW from last Thursday. In the short term, despite the seasonal peak, aluminum demand increased, and upward momentum for aluminum prices remained. However, downstream acceptance of high prices was moderate, and spot premium increases were slow. The model predicts that the average price range for SMM A00 aluminum premiums and discounts will be [-30, -5] yuan/mt, with a central value of -15 yuan/mt, an extreme price range of [-70, 40] yuan/mt, a normal price range of [-35, 0] yuan/mt, and a conservative price range of [-25, -10] yuan/mt.
In terms of aluminum billet inventory, the latest SMM data shows that as of March 27, 2025, the domestic social inventory of aluminum billets was 272,000 mt, down 16,000 mt WoW from last Thursday and 12,500 mt WoW from Monday. Regarding outflows from warehouses, with the deepening of the "Golden March and Silver April" peak consumption season, extrusion orders performed commendably. Coupled with the aluminum price center pulling back within a range, last week's aluminum billet outflows from warehouses reached 62,200 mt, hitting a new high for the year and successfully driving down aluminum billet inventory. This week, aluminum prices continued to adjust. With downstream consumption fully released at current aluminum prices, aluminum billet destocking remained stable. SMM believes that the logic of marginal strengthening in terminal restocking momentum has not changed. It is expected that domestic aluminum billet inventory will continue to decline steadily in the first half of April, with April inventory likely to pull back to the range of 200,000-250,000 mt.
The supply and demand fundamentals improved during the week, with SHFE aluminum maintaining range-bound adjustments and downstream buying sentiment performing well. Aluminum billet inventory continued its destocking trend, and the current market supply remained relatively ample. Suppliers intended to raise processing fees, while the demand side maintained a rhythm of bargain down purchasing prices. During the week, there was an expectation of tightening supply in the Foshan aluminum billet market, with good transaction conditions. The aluminum billet market quoted 160/210, up 30 from last Thursday. In the Wuxi market, specific models of aluminum billets experienced shortages, with processing fees quoted at 150/200, down 30 from last Thursday. The Nanchang market atmosphere was average, with processing fees quoted at 150/200, up 30 from last Thursday. (Unit: yuan/mt)
On the demand side for aluminum billets, the operating rate in the aluminum extrusion industry rose slightly by 1 percentage point WoW to 61%, with sub-sectors continuing to diverge. In industrial extrusions, top-tier automotive extrusion enterprises maintained an operating rate of over 80% with orders from the NEV industry chain. However, according to SMM surveys, some small and medium-sized building material enterprises that had previously ventured into industrial extrusions reported that automotive extrusions, due to complex process certifications and significant equipment investments, were increasingly concentrated in top-tier enterprises. The survey revealed that some small and medium-sized enterprises, suffering from severe product homogenization, had idle industrial production lines this week. In PV extrusions, despite continued pressure on processing fees, mainstream PV extrusion enterprises remained at full production due to the concentrated delivery period of component factories from March to April. In construction extrusions, some enterprises reported that the launch of local government special bond projects (such as high-speed rail transit and industrial parks) brought a recovery in public construction orders. This week, the operating rate of construction extrusions slightly increased, but demand for civilian building materials remained suppressed by the slowdown in real estate completions, with the operating rates of window, door, and aluminum formwork extrusion enterprises still relatively low. SMM will continue to track the destocking rhythm during the traditional peak season, focusing on the transmission efficiency of NEV and PV installation demand and the actual boost effect of local government special bonds on infrastructure projects.
