Inventory continues to accumulate, with spot premiums showing mixed performance [SMM spot aluminum noon review]

SMM reported on July 7: In the morning session, the center of the SHFE aluminum front-month contract shifted down to around 20,650 yuan/mt. As the futures market center moved down, overall market trading improved. Inventory buildup continued in east China, and the market was in a buyer's market with oversupply. Despite the decline in aluminum prices and an increase in downstream inquiries, market transactions were still at a discount of 10 to 20 yuan/mt against the SMM price. Today, SMM A00 aluminum was quoted at 20,640 yuan/mt, down 130 yuan/mt from the previous trading day, and at a discount of 30 yuan/mt against the July contract, down 10 yuan/mt from the previous trading day.

Trading in the central China market continued to improve during the day. The main reasons were: 1. Some cargoes were previously transferred to the surrounding areas of central China; 2. Major players previously stocked up on warrants in the market to hedge against the risk of a short squeeze in the July contract; 3. After the decline in aluminum price centers, downstream purchases slightly rebounded, with transactions at a premium of 20-30 yuan/mt against the SMM average price in central China. SMM A00 aluminum in central China was recorded at 20,510 yuan/mt against the SHFE aluminum 2507 contract, down 110 yuan/mt from the previous trading day. The price spread between Henan and Shanghai was -130 yuan/mt, narrowing by 20 yuan/mt from the previous trading day, and at a discount of 160 yuan/mt against the 2507 contract.

In terms of inventory, SMM weekly inventory was recorded at 478,000 mt, up 4,000 mt MoM. Inventory accumulated as expected during the off-season. Against the backdrop of a still firm price spread between futures contracts, spot premiums continued to face downward pressure.

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