The spot market was bleak today, with spot premiums declining rapidly in the short term [SMM Spot Aluminum Lunch Review]

SMM News on June 30

Today, SHFE aluminum prices moved lower in the morning session due to a slight inventory buildup of aluminum ingots. Trading in the spot market was sluggish. Coupled with the semi-annual period, there was a significant demand for capital repatriation. Suppliers at all levels offered discounts against the online price, but downstream demand remained weak, resulting in poor trading. In east China, the market initially offered at a discount of -20 to -10 yuan/mt against SMM prices in the morning, but gradually shifted to a discount of -30 yuan/mt. Today, SMM A00 aluminum was quoted at 20,780 yuan/mt, down 110 yuan/mt from the previous trading day, with a premium of 70 yuan/mt against the July contract, narrowing significantly by 30 yuan/mt from the previous trading day.

In the central China market, the morning session continued to see large discounts, but downstream production cuts and high inventory levels of raw materials and finished products led to a gloomy market atmosphere. The spot market offered at a discount of -20 yuan/mt against SMM central China prices, with the price spread against east China widening to 200 yuan/mt. Today, SMM central China A00 aluminum was recorded at 20,580 yuan/mt against the SHFE aluminum 2507 contract, down 130 yuan/mt from the previous trading day. The price spread between Henan and Shanghai was 200 yuan/mt, widening by 20 yuan/mt from the previous trading day, with a discount of 130 yuan/mt against the 2507 contract.

On the inventory side, according to SMM's domestic aluminum ingot inventory data, domestic aluminum ingot inventory stood at 468,000 mt on June 30, up 0.50 from the previous trading day. In the short term, despite aluminum ingot inventory remaining at a low level, there has been a slight trend of inventory buildup. The spot market is experiencing strong fear of high prices, with weak downstream demand and low purchase willingness. Transactions are occurring at discounts, and it is expected that spot premiums will narrow in the short term.

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