Aluminum Price Returns to 20,000, Downstream Purchase Enthusiasm Weakens [SMM Spot Aluminum Midday Review]

SMM April 25th News

SHFE aluminum fluctuated in the morning session, trading above 20,000 yuan/mt during the first trading period. In the spot market, trading in east China and central China was moderate, mainly due to increased spot market supply and aluminum prices returning to 20,000 yuan/mt, which dampened downstream purchasing enthusiasm. The market mostly traded at discounts to SMM. Specifically, spot premiums in east China pulled back again, with early market transactions at -10 against SMM. SMM A00 aluminum was quoted at 20,070 yuan/mt, up 90 yuan/mt from the previous trading day, at parity with the May contract, narrowing by 10 yuan/mt from the previous trading day.

Trading in central China was sluggish, with weak downstream purchasing. Early transactions were mainly at -10 to parity against SMM in central China. SMM central China A00 was recorded at 19,890 yuan/mt against the SHFE aluminum 2505 contract, up 90 yuan/mt from the previous trading day. The price spread between Henan and Shanghai was -90 yuan/mt, at a discount of 90 yuan/mt to the 2505 contract.

On the inventory side, according to SMM's domestic aluminum ingot inventory data for three regions, domestic aluminum ingot inventory in three regions stood at 531,100 mt on April 25th, down 6,400 mt from the previous day. In the short term, the fundamentals show no significant weakening in demand, providing support for domestic aluminum prices. However, a slight easing in macro conditions has driven futures market gains. With the domestic market approaching the transition between peak and off-peak seasons and ample market supply, spot aluminum premiums and discounts are expected to drop back slightly in the short term.

Data source: SMM

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