Amid the need for capital repatriation in mid-year, spot premiums fell sharply [SMM Spot Aluminum Lunchtime Review]

 SMM June 27 Report: In the morning session, the center of the SHFE aluminum front-month contract continued the night session's upward trend, fluctuating at highs near 20,700 yuan/mt. In east China, as processing fees for downstream processed aluminum materials fell, some enterprises faced losses and gradually entered the rhythm of production cuts. Additionally, due to suppliers' need to recoup funds by mid-year, they began to sell off inventory, and the market saw transactions at a discount of 20-30 yuan/mt against the SMM price. Today, SMM A00 aluminum was reported at 20,890 yuan/mt, up 280 yuan/mt from the previous trading day, with a premium of 100 yuan/mt against the July contract, down 30 yuan/mt from the previous trading day.

In the central China market, amid the off-season atmosphere, aluminum processing enterprises increasingly cut production, and the market was mainly dominated by long-term contract transactions. During the day, aluminum prices fluctuated at highs, with downstream processed aluminum material enterprises making few purchases. Suppliers continuously offered discounts, and transactions were made at a discount of 20-30 yuan/mt against the SMM central China average price. SMM central China A00 aluminum was recorded at 20,710 yuan/mt against the SHFE aluminum 2507 contract, up 260 yuan/mt from the previous trading day. The price spread between central China and Shanghai was -180 yuan/mt, widening by 20 yuan/mt from the previous trading day, with a discount of 80 yuan/mt against the 2507 contract.

On the inventory side, SMM weekly inventory was recorded at 314,000 mt, down 4,000 mt MoM, with the inventory drawdown speed gradually slowing down. Amid the off-season atmosphere, downstream processed aluminum material enterprises adjusted finished product inventories through production cuts, and spot market demand was sluggish. Next week, premiums are expected to drop back slightly further.

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