Futures Aluminum Breaks Through 21,000, Spot Transactions Weak with Discounts Widening [SMM Spot Aluminum Midday Review]

SMM October 23 news:

SHFE aluminum's morning trading center remained above 21,000 yuan/mt. In east China, suppliers' willingness to sell increased, but downstream purchasing was weak due to high absolute prices. Around the opening, suppliers attempted to offer at the average price to a discount of 10 yuan/mt, but trading was poor. After negotiations, actual transactions settled at a discount of 20 yuan/mt to a discount of 10 yuan/mt against the SMM average price. Today, the east China market selling sentiment index was 3.02, down 0.17 WoW; purchasing sentiment index was 2.97, down 0.15 WoW. Today, SMM spot A00 aluminum was quoted at 21,040 yuan/mt, up 60 yuan/mt from the previous trading day, at a discount of about 10 yuan/mt against the 2511 contract, down 10 yuan/mt from the previous trading day.

In central China, before and just after the opening, selling sentiment was high, but purchasing was limited. With high aluminum prices, fear of price declines was strong, and enterprises purchased cautiously, resulting in low trading volume. Around 10 a.m., large players entered the market to purchase at high prices, trading volume increased, and market transaction prices rose to a discount of 10 yuan/mt to near the average price. Overall purchasing sentiment rebounded. Today, the central China market selling sentiment index was 2.82, up 0.05 WoW; purchasing sentiment index was 2.70, up 0.04 WoW. SMM central China A00 aluminum was recorded at 20,910 yuan/mt, up 50 yuan/mt from the previous trading day, at a discount of 140 yuan/mt against the November contract, down 20 yuan/mt from the previous trading day. The Henan-Shanghai price spread was -130 yuan/mt, down 10 yuan/mt from the previous trading day.

Inventory side, national aluminum ingot inventory totaled 618,000 mt on Thursday, destocking 7,000 mt from Monday. In the short term, with high absolute aluminum prices, spot premiums and discounts are expected to operate under pressure.