Outflows from warehouses of aluminum ingots hit a yearly high in April, with inventory performance injecting a "strong boost" into the market [SMM Analysis].

First, let's review the inventory performance after the Qingming Festival. On the first day after the Qingming Festival, domestic aluminum ingot inventory showed a slight buildup of 9,000 mt. The reasons for this were twofold. On one hand, the holiday factor played a role, as cargo pick-up was insufficient during the three-day Qingming Festival, and downstream procurement before the holiday remained primarily driven by essential needs due to the significant macroeconomic uncertainties. On the other hand, the Gongyi region was affected by the influx of imported goods, with some warehouses experiencing concentrated arrivals. This was mainly due to the rapid narrowing of import losses recently, which increased the price advantage of some imported goods, primarily sourced from bonded warehouses in Shanghai and other locations.

However, the overall destocking trend in the first half of April remained unchanged.In mid-April, domestic aluminum ingot destocking performed prominently, with an unexpected performance at the end of the peak season. According to SMM, the recent shortage of railcars for shipments from Xinjiang has led to some being diverted to road transport. Since the end of March, the in-transit and inbound volumes of aluminum ingots in Wuxi and Gongyi have significantly decreased. Coupled with the rapid decline in aluminum prices earlier this week, which stimulated some market purchase demand, domestic aluminum ingot inventory dropped sharply by 85,000 mt in the past week. After successfully falling below 750,000 mt last Thursday, it broke through the 700,000 mt mark again this week, further strengthening the fundamental support for the aluminum market and effectively boosting market confidence. According to the latest SMM statistics, the inventory of aluminum ingots in mainstream domestic consumption areas stood at 689,000 mt on April 17, down 35,000 mt from Monday this week and 55,000 mt WoW from last Thursday. SMM believes that after a significant pullback in aluminum prices recently, the domestic aluminum ingot outflows from warehouses have notably strengthened, and the overall arrivals have been low since the weekend, maintaining a rapid destocking pace. The outflows from warehouses also exceeded expectations. According to SMM statistics, the total outflows from warehouses of domestic aluminum ingots in the past week (April 7-13) reached 154,400 mt, an increase of 30,900 mt WoW, hitting a new high for 2025. Looking at arrivals, the weekend arrivals in Wuxi decreased by about 800 mt WoW from last Monday, while arrivals in South China dropped by about 4,000 mt. Although Gongyi still saw a certain amount of Russian aluminum ingots being warehoused, the concentration level eased compared to after the Qingming Festival. SMM expects that the destocking trend will continue in the second half of April, with domestic aluminum ingot inventory likely to pull back to 600,000-650,000 mt by month-end.

Overall, domestic arrivals decreased significantly WoW in the recent week, and outflows from warehouses performed stronger than expected after the recent sharp correction in aluminum prices. Domestic aluminum ingot inventory is expected to maintain a rapid destocking pace in the short term. Whether the destocking trend can continue depends on two factors: first, the supply side needs to closely monitor the movements of the import window and whether domestic inventory performance will be affected by imported sources; second, attention should be paid to the end of the traditional peak season of "Golden March and Silver April" and whether the strong outflows from warehouses of domestic aluminum ingots can be sustained.

In terms of aluminum billet inventory, according to SMM statistics, the inventory in mainstream consumption areas in China stood at 209,200 mt on April 17, a decrease of 17,200 mt from Monday of the same week and a drop of 25,900 mt WoW from the previous Thursday. Regarding outflows from warehouses, aluminum billet outflows from warehouses totaled 61,100 mt from April 7 to April 13, an increase of 2,500 mt WoW from the previous week. On the processing fee front, SHFE aluminum experienced a significant decline last week due to macro sentiment fluctuations, leading to a temporary rise in processing fees. However, as aluminum prices rebounded subsequently, processing fees remained within a consolidation range. In terms of transactions, despite a noticeable downward shift in the price center, downstream players maintained a cautious stance due to high volatility in the futures market, resulting in a divergence in market performance. Overall, transactions were relatively subdued. SMM believes that although the peak consumption season of "Golden March and Silver April" continues, the overall destocking trend remains unaffected. However, due to macro sentiment fluctuations, the temporary suspension of tariff issues, and the sharp volatility in aluminum prices, the downstream restocking pace has slowed, leading to a slight deceleration in the decline of aluminum billet inventory. As mid-to-late April approaches and the peak season gradually comes to an end, concerns about extrusion production have begun to emerge. It is expected that aluminum billet inventory will remain within the range of 200,000-250,000 mt in the second half of April, with the pace of inventory decline potentially facing further slowdown.

In terms of aluminum billet inventory, according to SMM statistics, the inventory in mainstream consumption areas in China stood at 209,200 mt on April 17, a decrease of 17,200 mt from Monday of the same week and a drop of 25,900 mt WoW from the previous Thursday. Regarding outflows from warehouses, aluminum billet outflows from warehouses totaled 61,100 mt from April 7 to April 13, an increase of 2,500 mt WoW from the previous week. On the processing fee front, SHFE aluminum experienced a significant decline last week due to macro sentiment fluctuations, leading to a temporary rise in processing fees. However, as aluminum prices rebounded subsequently, processing fees remained within a consolidation range. In terms of transactions, despite a noticeable downward shift in the price center, downstream players maintained a cautious stance due to high volatility in the futures market, resulting in a divergence in market performance. Overall, transactions were relatively subdued. SMM believes that although the peak consumption season of "Golden March and Silver April" continues, the overall destocking trend remains unaffected. However, due to macro sentiment fluctuations, the temporary suspension of tariff issues, and the sharp volatility in aluminum prices, the downstream restocking pace has slowed, leading to a slight deceleration in the decline of aluminum billet inventory. As mid-to-late April approaches and the peak season gradually comes to an end, concerns about extrusion production have begun to emerge. It is expected that aluminum billet inventory will remain within the range of 200,000-250,000 mt in the second half of April, with the pace of inventory decline potentially facing further slowdown.