Trading in the East China market was sluggish, with spot aluminum discounts remaining flat. [SMM Spot Aluminum Midday Review]

SMM December 3:

The SHFE aluminum December contract mainly fluctuated upward in the morning session. In east China, market activity remained sluggish, with high absolute prices leading to poor downstream buying sentiment; some traders, optimistic about future aluminum prices, controlled shipments, causing a slight rebound in selling sentiment. 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 2.82 today, up 0.01 MoM; the purchasing sentiment index was 2.69, flat MoM. SMM A00 aluminum was quoted at 21,800 yuan/mt, up 90 yuan/mt from the previous trading day, at a discount of 50 yuan/mt against the December contract, flat from the previous trading day.

Trading in the central China market recovered today. Downstream enterprises, bullish on aluminum prices, showed improved purchasing sentiment, prompting traders to make substantial purchases. However, due to high absolute spot aluminum prices, the increase in premiums and discounts was relatively small. With limited spot supply available and buyers preferring large discounts, holders held prices firm and were reluctant to sell. Ultimately, actual transaction prices ranged from a discount of 10 yuan/mt to a premium of 20 yuan/mt against the central China price. The central China market selling sentiment index was 2.96 today, up 0.01 MoM; the purchasing sentiment index was 2.85, up 0.03 MoM. SMM central China aluminum closed at 21,680 yuan/mt, up 100 yuan/mt from the previous trading day, at a discount of 170 yuan/mt against the December contract, up 10 yuan/mt from the previous trading day. The price spread between Henan and Shanghai was -120 yuan/mt, up 10 yuan/mt from the previous trading day.

Inventory side, combined aluminum ingot inventories in major consumption areas totaled 453,000 mt on Wednesday, destocking 2,000 mt WoW.As the off-season deepens, the casting ingot rate increases, and demand marginally weakens; coupled with holders actively shipping and collecting payments by year-end, spot premiums and discounts are expected to remain under pressure in the short term.