Downstream demand gradually declines, spot premiums under pressure [SMM Spot Aluminum Midday Review]

SMM June 9: SHFE aluminum surged to around 20,180 yuan/mt in early trading, then the price center dropped back slightly and fluctuated rangebound near 20,130 yuan/mt. Under the high price spread between futures contracts, suppliers faced increasing inventory pressure and showed strong shipment willingness. However, downstream consumption already weakened, with some processing materials operating at reduced capacity. The market traded SMM A00 aluminum at a discount of 10 yuan/mt. Today, SMM A00 aluminum was quoted at 20,210 yuan/mt, down 20 yuan/mt from the previous trading day, at a premium of 70 yuan/mt against the June contract, down 10 yuan/mt from the prior session.

In central China, tight supply and low inventory kept suppliers firm on premiums, with offers ranging from a 10 yuan/mt premium to parity. However, downstream processing enterprises saw shipments decline continuously since June, with finished product inventories starting to build up. Some companies gradually cut production, and premiums are expected to fall. SMM A00 aluminum in central China was recorded at 20,150 yuan/mt against the SHFE 2506 contract, down 20 yuan/mt from the previous session. The price spread between Henan and Shanghai stood at -60 yuan/mt, flat from the prior day, at a 10 yuan/mt premium against the 2506 contract, down 10 yuan/mt.

Inventory side, SMM's weekly social inventory broke below the 500,000 mt mark to 477,000 mt, down 27,000 mt WoW. With the backwardation structure and consumption gradually entering the off-season, premiums will remain under pressure. However, inventories are expected to linger at low levels for an extended period, limiting the pace and extent of premium declines.

》Subscribe to view SMM metal spot historical prices