Holders actively offload goods, spot discounts in east China widen [SMM Spot Aluminum Midday Review]

SMM November 27:

SHFE aluminum December contract mainly traded sideways. In east China, approaching year-end, holders actively sold goods for cash flow, increasing spot supply in the market. Downstream buyers mainly made just-in-time procurement. At market opening, transactions were at a discount of around 10 yuan/mt against the SMM average price. Absolute prices rose slightly MoM from yesterday, prompting holders to show slightly increased willingness to sell, expanding spot discounts. Actual transaction prices were mainly at a discount of around 20 yuan/mt against the SMM average price. Today, the east China market selling sentiment index was 2.94, down 0.04 MoM; the purchasing sentiment index was 2.78, down 0.10 MoM. On November 27, SMM A00 aluminum closed at 21,460 yuan/mt, up 60 yuan/mt from the previous trading day, at a discount of 40 yuan/mt against the December contract, down 20 yuan/mt from the previous trading day.

Today, the central China market remained predominantly sluggish. SHFE aluminum futures prices rebounded narrowly. From pre-market opening, prices were weak and continued to develop. Downstream traders preferred to purchase at large discounts, but with year-end long-term contract signings approaching, traders showed clear intentions to hold prices firm, resulting in transaction prices higher than buyers' offers. Final actual transaction prices ranged from parity to a discount of 20 yuan/mt against the central China price. Today, the central China market selling sentiment index was 2.94, down 0.01 MoM; the purchasing sentiment index was 2.81, down 0.06 MoM. SMM central China closed at 21,340 yuan/mt, up 50 yuan/mt from the previous trading day, at a discount of 160 yuan/mt against the December contract, down 30 yuan/mt from the previous trading day. The Henan-Shanghai price spread was -120 yuan/mt, down 10 yuan/mt from the previous trading day.

Inventory side, national aluminum ingot inventory totaled 596,000 mt on Thursday, destocking 17,000 mt from Monday.As the off-season deepens, casting ingot rates increase, and demand marginally weakens; coupled with holders actively selling for year-end cash flow, spot premiums and discounts are expected to remain under pressure in the short term.