The pullback in prices stimulated downstream purchases, and trading in today's spot market improved [SMM Spot Aluminum Midday Review]

Published: Jul 15, 2025 14:01

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[SMM Spot Aluminum Midday Review: Price Pullback Stimulates Downstream Purchases, Spot Market Transactions Improve Today] On the inventory side, according to SMM's data on aluminum ingot inventories in three domestic regions, as of July 15, the domestic inventory of electrolytic aluminum ingots stood at 342,000 mt, a destocking of 5,000 mt from the previous trading day. In the short term, the casting ingot volume in the spot market has increased, providing some supply to the market. Aluminum ingot inventories have shifted to inventory buildup. Additionally, the off-season sentiment in the spot market is strong, with weak downstream demand leading to significant production cuts. It is difficult for purchases to see a qualitative improvement. Transactions in the spot market are mainly conducted at discounts. As the contract rollover approaches, fluctuations in the price spread between futures contracts may lead to changes in spot premiums/discounts.

SMM News on July 15

Today, SHFE aluminum opened and maintained oscillation around 20,470 yuan/mt. Compared to the futures-spot price spread of last week, after a significant drop yesterday, the market transaction atmosphere improved. Downstream purchase willingness increased compared to last week, driving a slight destocking in the mainstream consumption areas during the week. Specifically, in east China, the market still offered at -10 yuan/mt against the SMM average price in the morning, and downstream purchase willingness improved. Most transactions today were at parity with the SMM price. Today, SMM A00 aluminum ingot was reported at 20,510 yuan/mt, up 40 yuan/mt from the previous trading day, with a premium of 50 yuan/mt against the 07 contract, up 110 yuan/mt from the previous trading day. This was mainly due to the impact of price spread fluctuations between futures contracts as contract rollover approached, with no significant improvement in the fundamental supply and demand situation.

The transaction volume in the central China market also improved today compared to yesterday. Coupled with a decrease in supplier shipments, the spot market price stabilized. Today, the market traded at -10 yuan/mt to parity with the SMM central China price, with the price spread between Henan and Shanghai maintained at 140 yuan/mt and a discount of 90 yuan/mt against the 2507 contract.

In terms of inventory, according to SMM's domestic aluminum ingot inventory data from three regions, domestic aluminum ingot inventory stood at 342,000 mt on July 15, down 5,000 mt from the previous trading day. In the short term, with an increase in casting ingot volume in the spot market and a replenishment of market supply, aluminum ingot inventory has shifted to inventory buildup. Additionally, the off-season sentiment in the spot market is strong, with poor downstream demand and significant production cuts. It is difficult for purchases to see a qualitative improvement, and transactions are mainly at discounts. As contract rollover approaches, fluctuations in the price spread between futures contracts may lead to changes in spot premiums and discounts.

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