Daily total inventory across three regions declined slightly, while spot premiums remained stable [SMM Spot Aluminum Midday Review]

SMM News on July 9: In the morning session, the center of SHFE aluminum prices rose slightly to around 20,650 yuan/mt. As aluminum prices fell, downstream just-in-time procurement picked up slightly, and daily inventory in east China declined slightly. Most transactions were concluded at spot premiums against the SMM average price, with premiums stabilizing somewhat. Today, SMM A00 aluminum was quoted at 20,660 yuan/mt, up 60 yuan/mt from the previous trading day, and at a discount of 50 yuan/mt against the July contract, unchanged from the previous trading day.
Against the backdrop of some cargoes being transferred from the central China market to surrounding areas in the early stage and large traders hoarding warrants in the market to cope with the risk of short squeezing on the July contract, after experiencing several consecutive days of spot premiums against the central China average price, the activity in the central China market began to pull back amid the off-season atmosphere. Transactions were concluded at a premium of 20 yuan/mt against the SMM central China average price, relatively similar to yesterday. SMM central China A00 aluminum was recorded at 20,550 yuan/mt against the SHFE aluminum 2507 contract, up 70 yuan/mt from the previous trading day. The price spread between Henan and Shanghai was -110 yuan/mt, narrowing by 10 yuan/mt from the previous trading day, and at a discount of 160 yuan/mt against the 2507 contract.
On the inventory side, SMM daily inventory was recorded at 325,500 mt, down 6,500 mt MoM. Inventory accumulated as expected amid the off-season atmosphere, and spot premiums continued to face downward pressure amid the still strong price spread between futures contracts.

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