Electrolytic Aluminum Sellers Hold Prices Firm, Discounts Narrow [SMM Spot Aluminum Midday Review]

SMM January 8:

SHFE aluminum 2601 contract fluctuated downward in the morning session, with the price center lower than the previous trading day. Sellers held back from selling, reducing market circulation, and overall trading sentiment weakened WoW. Sellers held prices firm. Today, mainstream transaction prices were mainly in the range of a premium of 30 yuan/mt to 60 yuan/mt against the SMM price. The east China market selling sentiment index was 2.38, down 0.12 WoW; the purchasing sentiment index was 2.68, down 0.10 WoW. SMM A00 aluminum was quoted at 24,000 yuan/mt, down 140 yuan/mt from the previous trading day, at a discount of 150 yuan/mt against the 2601 contract, narrowing by 50 yuan/mt from the previous trading day.

The central China market selling sentiment remained at the previous day's level. With excessive premiums/discounts, holders held back from selling, leading to scarce spot aluminum supply. Downstream processing enterprises maintained minimal or suspended purchases due to high absolute prices, but traders actively purchased for hedging, driving prices higher. However, trading volume remained low, and prices began to weaken slightly after 9:40 AM. Final transaction prices ranged from a premium of 10 yuan/mt to 60 yuan/mt against the central China price. The central China market selling sentiment index was 2.47, down 0.02 WoW; the purchasing sentiment index was 2.13, up 0.06 WoW. SMM central China aluminum price closed at 23,810 yuan/mt, down 120 yuan/mt from the previous trading day, at a discount of 340 yuan/mt against the 2601 contract, up 70 yuan/mt from the previous trading day; the Henan-Shanghai price spread was -190 yuan/mt, up 20 yuan/mt from the previous trading day.

Inventory side, aluminum ingot inventory in major consumption areas increased by 1,500 mt WoW on Wednesday, with Wuxi being the main source of inventory buildup. In the short term, high aluminum prices may continue to suppress end-use demand, and aluminum ingots still face inventory buildup risks. Spot premiums/discounts are expected to remain under pressure.