Spot aluminum in east China refuses to budge on prices, with transactions concentrated among traders [SMM Spot Aluminum Midday Review]

SMM, May 23

Today, SHFE aluminum fluctuated in the morning session, with its center moving higher. In terms of the spot market performance, spot aluminum in east China performed strongly. Despite the high aluminum prices, downstream purchase willingness decreased, while transactions among traders increased.

Specifically, trading sentiment in east China was good today. The relatively low arrival volumes provided strong support for prices. Downstream purchase willingness weakened, but traders showed strong reluctance to budge on prices amid low inventory. Due to the shortage of goods, suppliers were cautious in selling, and market transactions were mainly priced at a premium of 10 yuan/mt against the SMM price. Today, SMM A00 aluminum ingot prices were reported at 20,370 yuan/mt, up 10 yuan/mt from the previous trading day, with a premium of 80 against the 06 contract, unchanged from the previous trading day.

In the central China market, transactions were mainly concentrated on selling at the average SMM central China price today, with significant fluctuations in morning quotes. SMM central China A00 aluminum was recorded at 20,300 yuan/mt against the SHFE aluminum 2506 contract, up 10 yuan/mt from the previous trading day. The price spread between central China and east China was 70 yuan/mt, unchanged from the previous trading day, with a premium of 10 against the 2506 contract.

On the inventory side, according to SMM's domestic aluminum ingot inventory data, the three-region inventory of domestic aluminum ingots was 424,000 mt on May 23, a destocking of 8,000 mt from the previous day. In the short term, the relatively low arrival volumes in east China are conducive to the rise of premiums and discounts. Attention should be paid to changes in demand in the future.

Data source: SMM

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