The spot market remains sluggish, with the premium in east China narrowing rapidly [SMM spot aluminum noon review]

Published: Jul 2, 2025 12:06

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[SMM Spot Aluminum Lunch Review: Spot Market Remains Sluggish, East China Premiums Narrow Rapidly] On the inventory side, according to SMM's domestic aluminum ingot inventory data, the domestic inventory of electrolytic aluminum ingots in three regions stood at 329,000 mt on July 2, a destocking of 500 mt from the previous trading day. In the short term, despite the low aluminum ingot inventory, the increase in casting ingot production has supplemented market supply. Additionally, there is a strong fear of high prices in the spot market, coupled with poor downstream demand and significant production cuts, resulting in low purchase willingness. Transactions are occurring at discounts, and it is expected that the spot premiums will narrow in the short term.

SMM News on July 2

Today, SHFE aluminum opened strong in the morning session and then fluctuated at highs. As the first trading session neared its end, the futures market pulled back, closing at 20,800 yuan/mt. The spot market remained sluggish in the morning, with downstream purchase willingness insufficient. As the futures market rose, many regions saw transactions at a discount to SMM prices. Specifically, in east China, the market continued to offer at a discount of 30 to 20 yuan/mt against SMM prices in the early morning. Downstream purchase willingness was poor, with many executing long-term contracts. Spot premiums narrowed significantly by another 30 yuan/mt to 10 yuan/mt. Today, SMM A00 aluminum was quoted at 20,810 yuan/mt, up 30 yuan/mt from the previous trading day, with a premium of 10 against the July contract, narrowing by 30 yuan/mt from the previous trading day.

In the central China market, overall sales were lower today compared to yesterday, mainly due to the significant discounts in the market recently, which reduced suppliers' willingness to sell, coupled with the impact of cross-regional cargo transfers. Today, the spot market saw transactions at a discount of 10 yuan/mt to parity against SMM central China prices, with the price spread to east China narrowing to -200. Today, SMM central China A00 aluminum was recorded at 20,610 yuan/mt against the SHFE aluminum 2507 contract, up 50 yuan/mt from the previous trading day. The price spread between Henan and Shanghai was 200 yuan/mt, narrowing by 20 yuan/mt from the previous trading day, with a discount of 190 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 329,000 mt on July 2, a destocking of 500 mt from the previous trading day. In the short term, despite the low aluminum ingot inventory, the increase in casting ingot volume has supplemented market supply. Additionally, there is a strong fear of high prices in the spot market, with poor downstream demand and significant production cuts, leading to low purchase willingness and transactions at a discount. It is expected that spot premiums will show a narrowing trend in the short term.

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