The inflection point of aluminum billet inventory has not yet officially formed, but due to consumption pressure, processing fees in some regions have fallen below 100 yuan/mt. [SMM Aluminum Billet Weekly Review]

SMM News on June 12:

In terms of aluminum billet inventory, according to SMM statistics, the domestic aluminum billet inventory in major consumption areas stood at 127,500 mt on June 12, a decrease of 2,000 mt from Monday and a decline of 2,500 mt WoW, still hovering around 130,000 mt. Over the past week, the regional distribution of aluminum billet inventory has shown divergence. In the Wuxi area, there was still an increase in warehouse arrivals, but sluggish market transactions exacerbated the local inventory buildup. In the Nanchang area, due to the persistently high Shanghai-Guangdong price spread, more aluminum billets were transported from billet plants around South China to the Nanchang area, leading to an increase in local inventory, while arrivals in the Guangdong area were relatively low. In terms of outflows from warehouses, the total outflows from public warehouses of aluminum billets in China during the period from June 3 to June 8 amounted to 36,400 mt, a decrease of 1,200 mt from the previous period. Considering the impact of the Dragon Boat Festival holiday, market trading sentiment has actually eased somewhat. Currently, the inflection point of aluminum billet inventory has not yet officially formed. It is still necessary to continuously monitor the pace of changes in domestic consumption, the inventory of aluminum billets within factories, and the pace of changes in the Guangdong-Shanghai price spread. With the deepening of the off-season in consumption, it is expected that aluminum billet inventory will gradually enter the inventory buildup phase, operating within the range of 120,000-150,000 mt.

Regarding processing fees, SHFE aluminum continued to hold up well this week. The increase in the proportion of liquid aluminum and low social inventory provided strong support for aluminum prices. The center of aluminum prices continued to climb. However, against the backdrop of weakening demand for aluminum billets, suppliers intended to sell at high prices, causing processing fees to plummet. As of June 12, 2025, the market quotes for aluminum billets in the Foshan area were 180/230 yuan/mt, a decrease of 100 yuan/mt from last Thursday. In the Wuxi area, the processing fees for aluminum billets were quoted at 200/270 yuan/mt, a decrease of 50 yuan/mt from last Thursday. In the Nanchang area, the processing fees were quoted at 80/130 yuan/mt, a decrease of 150 yuan/mt from last Thursday. (Unit: yuan/mt)

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