The center of aluminum prices rebounds, while spot premiums are weak [SMM Spot Aluminum Midday Review]

SMM reported on July 10: In the morning session, SHFE aluminum prices rose to around 20,800 yuan/mt amid increased positions, while activity in the spot market weakened. In east China, due to the rebound in aluminum prices, downstream enterprises' procurement sentiment pulled back, and spot order transactions declined. Transactions against the SMM average price were around -10 yuan/mt. Today, SMM A00 aluminum was quoted at 20,820 yuan/mt, up 160 yuan/mt from the previous trading day, with a discount of 60 yuan/mt against the July contract, down 10 yuan/mt from the previous trading day.

In the central China market, the center of aluminum prices pulled back earlier, leading to an increase in downstream just-in-time procurement volume. Coupled with a decrease in incoming cargo, inventory showed destocking. However, after the center of aluminum prices rose during the day, downstream consumption weakened, and traders continuously adjusted premiums to sell. Transactions against the SMM central China average price were on par with to -10 yuan/mt. SMM central China A00 aluminum was recorded at 20,710 yuan/mt against the SHFE aluminum 2507 contract, up 160 yuan/mt from the previous trading day. The price spread between Henan and Shanghai was -110 yuan/mt, unchanged from the previous trading day, with a discount of 170 yuan/mt against the 2507 contract.

On the inventory side, SMM's daily inventory was recorded at 446,000 mt, down 12,000 mt MoM. The decrease in incoming cargo due to the backlog of some goods at the source station, combined with a slight improvement in downstream consumption following the earlier pullback in the center of aluminum prices, led to destocking. However, under the off-season atmosphere, with the subsequent resolution of station issues, inventory is expected to rebuild, and spot premiums will continue to face pressure.

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