Selling Pressure Eases, Purchasing Sentiment Rebounds, Spot Discounts in East China Narrow Expansion [SMM Spot Aluminum Midday Review]

SMM December 19 report:

In the morning session, SHFE aluminum 2601 contract fluctuated. The number of suppliers dumping inventory decreased, and downstream purchase willingness slightly recovered, with quotations mainly at a discount of 20 yuan/mt to SMM average price, and more concentrated at a discount of 10 yuan/mt to SMM average price. Today, the eastern China market's selling sentiment index was 2.43, down 0.04 MoM; the purchasing sentiment index was 2.48, up 0.07 MoM. SMM A00 aluminum closed at 21,820 yuan/mt, up 90 yuan/mt from the previous trading day, at a discount of 150 yuan/mt against the 2601 contract, down 10 yuan/mt from the previous trading day.

Today, the central China market's transaction sentiment continued to weaken, with aluminum prices retreating from high levels. Downstream enterprises showed lukewarm interest in purchasing, but some traders actively bought to complete long-term contract deliveries, leading to some transactions. Market quotations first weakened then recovered, with final actual transaction prices ranging from a discount of 10 yuan/mt to 40 yuan/mt against the central China price. Today, the central China market's selling sentiment index was 2.79, unchanged MoM; the purchasing sentiment index was 2.66, down 0.01 MoM. SMM central China closed at 21,690 yuan/mt, up 70 yuan/mt from the previous trading day, at a discount of 280 yuan/mt against the 2601 contract, down 30 yuan/mt from the previous trading day. The price spread between central China and SHFE was -130 yuan/mt, down 20 yuan/mt from the previous trading day.

Inventory-wise, on Friday, mainstream consumption areas saw an inventory buildup of 2,000 mt. In the short term, as year-end approaches, traders are eager to sell and recover funds, coupled with weakening demand, leading to reduced purchase willingness from downstream enterprises. Spot discounts are expected to be under pressure.