High spot prices Trading relatively sluggish in the East China spot market [SMM Spot Aluminum Noon Review]

SMM December 2:

The SHFE aluminum December contract hit bottom and rebounded in the morning session, with its trading center slightly lower than the previous trading day. In east China, market activity was sluggish, and the absolute price rose from earlier periods, while downstream buying sentiment was weak. Spot discounts widened, and traders' willingness to sell also weakened. Today's actual transaction prices were at a discount of 10 yuan/mt to parity against the SMM average price. The east China market selling sentiment index was 2.81, down 0.02 MoM, while the purchasing sentiment index was 2.69, down 0.01 MoM. SMM A00 aluminum closed at 21,710 yuan/mt, down 20 yuan/mt from the previous trading day, at a discount of 50 yuan/mt against the December contract, flat from the previous day.

In central China, buying sentiment slightly rebounded today. Traders preferred to deliver long-term contracts at large discounts, but holders showed strong willingness to hold prices firm and were reluctant to sell. Some large players held prices firm at a premium of 20 yuan/mt against the central China price. With aluminum prices high, downstream purchasing was lukewarm, and market transactions were weak. The final actual transaction prices ranged from a discount of 20 yuan/mt to a premium of 20 yuan/mt against the central China price. The central China market selling sentiment index was 2.95, down 0.01 MoM, while the purchasing sentiment index was 2.82, up 0.01 MoM. SMM central China closed at 21,580 yuan/mt, down 20 yuan/mt from the previous trading day, at a discount of 180 yuan/mt against the December contract, flat from the previous day. The price difference between Henan and Shanghai was -130 yuan/mt, flat from the previous day.

Inventory side, aluminum ingot inventory in major consumption areas totaled 455,000 mt on Tuesday, with an inventory buildup of 8,500 mt WoW.As the off-season deepens, the casting ingot rate increases, and demand marginally weakens; coupled with holders actively selling for year-end payments, spot premiums and discounts are expected to be under pressure in the short term.