Spot Aluminum Ingots in South China See Significant Price Hikes Amid Tight Supply, While Processing Fees of Aluminum Billets Widen Discounts with Weak Trading [SMM South China Spot Aluminum Daily Report]

SMM Jan. 7:

In South China's aluminum ingot market, the average SMM A00 aluminum (Foshan) price stood at 24,130 yuan/mt on Jan. 7, up 270 yuan/mt from the previous day, with a discount of 205 yuan/mt against the front-month contract, narrowing by 65 yuan/mt from yesterday.Spot market activity heated up, as tight arrivals coupled with inventory drawdowns and a low spot-futures price spread fueled strong bullish sentiment among suppliers. They actively raised offers and held back cargoes, with quotes continuously increasing from +10 to +40 yuan/mt, leading to tightening availability. Downstream users made just-in-time procurement to maintain production, while traders briefly hesitated before rushing to sweep goods. Large buyers raised prices to purchase, boosting heated transactions. Later, as futures prices fluctuated higher, only a few buyers rushed to buy amid continuous price rise to replenish low-priced supplies, and trading activity weakened.

In South China's aluminum billet market, the processing fees for SMM 6063 aluminum billets (Guangdong) across specifications came under significant pressure and pulled back on Jan. 7. The average fee for Φ90/100 was -80 yuan/mt, and for Φ120 and above specifications was -130 yuan/mt, down 50 yuan/mt from the previous day.Against the backdrop of continued rises in the base price, downstream fear of high prices persisted, with buyers widely pushing for lower prices and making limited purchases. Although intraday futures gains attracted some just-in-time and hedging demand, merchants still had to lower offers to stimulate demand, resulting in dismal overall trading.