Spot premiums continue to fall amid sluggish market transactions [SMM Spot Aluminum Lunch Review]

SMM, July 1 News

Today, during the first trading session of the SHFE aluminum morning market, the price center shifted downward and then oscillated around 20,735 yuan/mt, while the price spread between futures contracts showed a widening trend. The spot market remained sluggish, with premiums continuing to decline across regions. In east China, the market initially offered SMM -30 to -20 in the morning, and gradually shifted to -30 yuan/mt for transactions. Today, SMM A00 aluminum ingot prices were reported at 20,780 yuan/mt, unchanged from the previous trading day, with a premium of 40 against the July contract, narrowing significantly by 30 yuan/mt from the previous trading day.

In the central China market, the impact of downstream production cuts and high inventory levels of raw materials and finished products persisted, leading to a gloomy market atmosphere and poor sales. The spot market offered SMM central China -20, with the price spread against east China widening to -220. Today, SMM central China A00 aluminum ingot prices were recorded at 20,560 yuan/mt against the SHFE aluminum 2507 contract, down 20 yuan/mt from the previous trading day. The price spread between central China and east China was 220 yuan/mt, widening by 20 yuan/mt from the previous trading day, with a discount of 180 yuan/mt against the 2507 contract.

On the inventory side, according to SMM's domestic aluminum ingot inventory data, domestic aluminum ingot inventory in three regions stood at 329,500 mt on July 1, showing an inventory buildup of 0.65 from the previous trading day. In the short term, despite the low aluminum ingot inventory levels, there has been a slight trend of inventory buildup. The spot market is experiencing strong fear of high prices, with poor downstream demand and significant production cuts, leading to low purchase willingness. Transactions are being made at discounts, and it is expected that the spot premiums will show a narrowing trend in the short term.

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