Aluminum billet inventory hovered at 150,000 mt after the holiday, with resilient demand and processing fees fluctuating at highs. [[SMM Weekly Review of Aluminum Billets]]

SMM News on May 8:

Regarding aluminum billet inventory, according to SMM statistics, as of May 8, the aluminum billet inventory in major domestic consumption areas reached 1.575 million mt, an increase of 6,500 mt from before the holiday (April 30), but still a decrease of 53,600 mt compared to the same period last year, remaining at a low level for the same period over the past three years. After the holiday, domestic aluminum billet inventory first increased and then decreased, mainly due to manufacturers maintaining normal production during the Labour Day holiday, leading to an increase in warehouse arrivals. However, after the holiday, the market experienced sharp fluctuations, with aluminum prices plummeting, stimulating downstream restocking after the holiday and promoting the continued de-stocking of aluminum billet inventory. From the perspective of outflows from warehouses data, aluminum billet outflows from warehouses from April 29 to May 6 were 42,600 mt, a decrease of 9,300 mt compared to the same period last year. As the peak season gradually transitions to the off-season, the resilience of domestic aluminum billet downstream consumption faces certain challenges. After the holiday, due to normal production by manufacturers during the holiday, there is a risk of short-term inventory buildup in social warehouses as arrivals increase. SMM expects aluminum billet inventory to operate within the range of 150,000-200,000 mt in the short term. Whether an inventory buildup trend forms will depend on close attention to the sustainability of downstream consumption.

After the holiday, the performance of the macro front and fundamentals remained relatively stable. The outbreak of tariff-related trade wars has led to cautious and bearish market sentiment. Coupled with insufficient cost support for SHFE aluminum, the market trading logic has shifted closer to the cost side, resulting in fluctuating performance of SHFE aluminum. After the holiday, affected by the rapid downward shift in the price center of aluminum, aluminum billet processing fees have adjusted upwards. Combined with downstream restocking after the holiday, market supply is tight while demand remains strong, with processing fee quotes in the three regions remaining high. As of May 8, 2025, the aluminum billet market in Foshan reported 430/480 yuan/mt, an increase of 110 yuan/mt from before the holiday. In Wuxi, aluminum billet processing fees were reported at 450/500 yuan/mt, an increase of 100 yuan/mt from before the holiday. In Nanchang, processing fees were reported at 500/550 yuan/mt, an increase of 100 yuan/mt. (Unit: yuan/mt)

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