Social inventory of aluminum ingots approaches 450,000 mt, SHFE aluminum continues to surge today [SMM LME Aluminum Brief Comment]

》Check SMM aluminum product quotes, data, and market analysis

SMM News on June 12:

Today, the most-traded SHFE aluminum 2507 contract opened at 20,230 yuan/mt, with a high of 20,450 yuan/mt, a low of 20,215 yuan/mt, and closed at 20,395 yuan/mt, up 1.12%. Trading volume was 169,000 lots, and open interest was 207,000 lots.

SMM Commentary: Overall, on the macro front, the Sino-US consultation meeting is expected to ease trade tensions, while the rebound in China's May manufacturing PMI and improved export indicators provide demand support, indicating that the domestic economy remains resilient. On the fundamental side, the current low inventory and the expectation of a rising proportion of liquid aluminum provide strong support for aluminum prices. However, the off-season pressure on the demand side limits the upside room. Spot aluminum ingots in major consumption areas may soon face a situation of weak supply and demand, with aluminum prices likely to remain rangebound and volatile in the short term.

Today, the most-traded alumina 2509 contract opened at 2,890 yuan/mt, with a high of 2,915 yuan/mt, a low of 2,866 yuan/mt, and closed at 2,895 yuan/mt, down 0.1%. Trading volume was 332,000 lots, and open interest was 295,000 lots.

SMM Commentary: Last week, the operating capacity of alumina rebounded by 600,000 mt/year to 87.27 million mt/year. It is understood that some imported alumina has arrived at Chinese ports. With supply recovering and no significant changes in demand, the total inventory of alumina at aluminum smelters increased by 19,000 mt to 2.63 million mt last week. As of June 11, the loss margin of imported alumina prices widened, and the import window remained closed. In the short term, the alumina market fundamentals are expected to remain relatively loose, with spot alumina prices likely to remain in the doldrums. Follow-up attention should be paid to changes in the capacity of domestic alumina enterprises and the transportation of previously imported alumina.

Today, the most-traded cast aluminum alloy 2511 contract opened at 19,435 yuan/mt, with a high of 19,490 yuan/mt, a low of 19,355 yuan/mt, and closed at 19,460 yuan/mt, up 0.54%. Trading volume was 12,000 lots, and open interest was 11,000 lots.

SMM Commentary: In the spot market, today's SMM A00 aluminum price rose by 250 yuan/mt from the previous trading day to 20,650 yuan/mt. Domestic SMM ADC12 prices increased by 100 yuan/mt to the range of 19,900-20,100 yuan/mt. Driven by the rapid rise in cost side, the market quotes for ADC12 generally increased by 100 yuan/mt today, but weak demand continued to suppress its price upside room. It is expected that ADC12 prices will remain rangebound in the short term, and the discount to A00 aluminum will persist. In the import market, the CIF quotes for imported ADC12 rose again to $2,410-2,450/mt, and the spot import price increased by 100 yuan/mt to around 19,200 yuan/mt. As overseas price increases outpaced the domestic market, the immediate import loss widened again to 500-700 yuan/mt. The local tax-excluded quotes for ADC12 in Thailand rose to 81-82 baht/kg.

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