Futures Aluminum Prices Retreat, Spot Aluminum Trading Sentiment Recovers [SMM Aluminum Spot Market Midday Review]

SMM December 9 news:

SHFE aluminum December contract fluctuated upward in the morning session, but the absolute price pulled back compared with the previous trading day. Market transaction sentiment recovered in east China, with downstream maintaining just-in-time procurement, while traders actively made purchases. Spot discounts were relatively large, and holders held prices firm and were reluctant to sell. Actual transactions were mainly at parity to a premium of 10 yuan/mt against the SMM average price, and spot discounts showed signs of narrowing. Today, the east China market selling sentiment index was 2.71, up 0.09 MoM; the purchasing sentiment index was 2.63, up 0.03 MoM. SMM A00 aluminum was quoted at 21,770 yuan/mt, down 110 yuan/mt from the previous trading day, at a discount of 90 yuan/mt against the December contract, flat from the previous trading day.

Today, transaction conditions in the central China market held steady. The absolute futures price pulled back, and downstream purchase willingness rebounded. However, due to large premiums and discounts and the price spread between futures contracts, most holders adopted a wait-and-see stance. The market atmosphere was characterized by a relative shortage of goods, and purchasers successively raised their bids, leading to continuously rising market quotations. Ultimately, actual transaction prices ranged from a premium of 10 yuan to a premium of 50 yuan against the central China price. Today, the central China market selling sentiment index was 2.78, down 0.08 MoM; the purchasing sentiment index was 2.79, up 0.01 MoM. SMM central China aluminum closed at 21,660 yuan/mt, down 80 yuan/mt from the previous trading day, at a discount of 200 yuan/mt against the December contract, up 30 yuan/mt from the previous trading day. The price spread between Henan and Shanghai was -110 yuan/mt, up 30 yuan/mt from the previous trading day.

Inventory side, aluminum ingot inventory in major consumption areas totaled 434,000 mt on Wednesday, destocking 5,500 mt WoW. Aluminum ingot inventory continued to show destocking. Seasonal factors affected the transportation of aluminum ingots from Xinjiang, leading to some accumulation of ingots in Xinjiang. Aluminum ingot inventory is expected to show a slow destocking trend in the short term. In the short term, with the absolute price pulling back, traders are expected to hold prices firm to repair spot discounts, and spot discounts are expected to narrow.