Market arrivals are expected to be low, and suppliers show clear reluctance to budge on prices [SMM Spot Aluminum Midday Review]

SMM News on May 29: After aluminum prices surged continuously to 20,300 yuan/mt in the morning session today, they pulled back under pressure. In east China, as inventory levels have continued to decline recently, suppliers generally have a strong reluctance to budge on prices. Currently, it is expected that there will not be many in-transit cargoes arriving in east China in the subsequent period. Coupled with the continuous purchases by major players in the market, premiums have risen continuously, with market transactions against the SMM average price ranging from a discount to a premium of 10 yuan/mt. Today, SMM A00 aluminum was quoted at 20,380 yuan/mt, up 30 yuan/mt from the previous trading day, with a premium of 110 yuan/mt against the June contract, up 10 yuan/mt from the previous trading day.

In the central China market, suppliers rushed to sell their cargoes in the morning session, pushing the spot market into a discount. As aluminum prices continued to rebound, the market worried about further price surges and began to replenish stocks. Overall, consumption in central China showed a weakening trend, with downstream purchasing power slowing down. However, the volume of in-transit cargoes in the market also declined on a WoW basis, presenting a situation of weak supply and demand. There were slight differences between buyers and sellers, and premiums remained stagnant. SMM central China A00 aluminum was recorded at 20,310 yuan/mt against the SHFE aluminum 2506 contract, up 30 yuan/mt from the previous trading day. The price spread between central China and Shanghai was -70 yuan/mt, unchanged from the previous trading day, with a premium of 40 yuan/mt against the 2506 contract, up 10 yuan/mt.

On the inventory side, as of May 29, the domestic weekly inventory of aluminum ingots was 511,000 mt, down 23,000 mt. Downstream stockpiling ahead of the holiday, coupled with the expectation of low arrivals in the market, has led to tightening supply in the spot market. Spot premiums are expected to remain high ahead of the holiday.

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