Inventory Drawdown in Major Consumption Regions Supports Aluminum Prices [SMM Spot Aluminum Midday Review]

SMM, June 4 Report

Today, SHFE aluminum fluctuated upward in the morning session. Outflows from warehouses were good in major consumption areas. In terms of spot market performance, spot aluminum in east China performed moderately, with a focus on selling. High premiums loosened somewhat, and early in the morning, the market saw transactions at a -10 yuan/mt discount against the SMM average price. Today, SMM A00 aluminum was quoted at 20,280 yuan/mt, up 160 yuan/mt from the previous trading day, with a premium of 100 yuan/mt against the June contract, narrowing by 10 yuan/mt from the previous trading day.

In the central China market, premiums held steady today, with transactions mainly focused on selling against the SMM central China average price. SMM A00 aluminum in central China was recorded at 20,230 yuan/mt against the SHFE aluminum 2506 contract, up 160 yuan/mt from the previous trading day. The price spread between central China and east China was 50 yuan/mt, unchanged from the previous trading day, with a premium of 50 yuan/mt against the 2506 contract.

On the inventory side, according to SMM data on aluminum ingot inventory in three domestic regions, domestic aluminum ingot inventory stood at 391,500 mt on June 4, a destocking of 10,500 mt from the previous trading day. In the short term, the lower arrival of goods is conducive to maintaining premiums, but downstream acceptance of high premiums has decreased. Coupled with active selling by holders, premiums and discounts are expected to drop back slightly in the short term.

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