SMM December 18 News:
According to SMM statistics, domestic aluminum billet inventory in mainstream consumption areas totaled 119,500 mt on December 18, down 7,000 mt from Monday but up 3,000 mt WoW. For warehouse withdrawals, withdrawals during 12.8-12.12 reached 43,200 mt, a decrease of 3,400 mt from the previous week, marking a four-week consecutive decline. The aluminum billet market recently saw weakening supply and demand. Earlier tight logistics capacity in Xinjiang led to fewer arrivals at regional warehouses. However, persistently high aluminum prices, coupled with year-end enterprise settlements and weakening end-use consumption, continued to drag down withdrawals, resulting in inventory maintaining a sideways movement. Looking ahead to next week, the tight logistics situation in Xinjiang is expected to ease slightly, with railway in-transit volume increasing MoM. Warehouse arrivals are forecast to improve significantly. Yet, with weak consumption trends persisting, the market is likely to shift towards an oversupply pattern. Aluminum billet inventory may stop falling and rebound, while processing fees face renewed downward pressure.
This week, the aluminum price center continued to move lower, trading near the monthly average, while aluminum billet processing fees showed regional divergence. Processing fees in Foshan were quoted at 400-450 yuan/mt, up 20 yuan/mt WoW; Wuxi at 250-380 yuan/mt, up 40-80 yuan/mt WoW; and Nanchang at 200-250 yuan/mt, down 30 yuan/mt WoW. Foshan maintained relatively strong conditions supported by low inventory levels. In Wuxi, weak downstream demand led to continuously weaker aluminum billet shipments. Nanchang saw increased arrivals but lacked demand support. Next week, with expectations of weaker year-end consumption and increased arrivals, downward pressure on processing fees is expected to gradually emerge. Aluminum billet processing fees are likely to maintain a weak consolidation pattern.
