Aluminum Prices Fluctuated Upward, Trading Sentiment Declined [SMM Spot Aluminum Midday Review]

SMM January 12:

SHFE aluminum 2601 contract fluctuated upward in the morning session, but the price center rose compared to the previous trading day. High aluminum prices suppressed downstream purchase demand, and overall trading sentiment weakened WoW.

Mainstream transaction prices were mainly in the range of SMM discount of 30 yuan/mt to the average price. Today, the east China market selling sentiment index was 2.64, down 0.07 WoW; the purchasing sentiment index was 2.74, down 0.08 WoW. SMM A00 aluminum was quoted at 24,340 yuan/mt, up 310 yuan/mt from the previous trading day, at a discount of 100 yuan/mt against the 2601 contract, flat from the previous trading day.

The absolute aluminum price rose today, and previously accumulated premiums/discounts were high, leading to a significant decrease in purchasers. However, selling sentiment in the central China market increased, major holders showed stronger willingness to sell, spot supply circulation was loose, and the willingness to hold prices firm gradually weakened. Ultimately, the actual transaction price in the central China market fell from a premium of 30 yuan/mt against the central China price before the opening to a discount of 10 yuan/mt against the central China price. Today, the central China market selling sentiment index was 2.58, up 0.11 WoW; the purchasing sentiment index was 1.40, up 0.73 WoW. SMM central China aluminum price closed at 24,180 yuan/mt, up 320 yuan/mt from the previous trading day, at a discount of 260 yuan/mt against the 2601 contract, up 10 yuan/mt from the previous trading day; the Henan-Shanghai price spread was -160 yuan/mt, up 10 yuan/mt from the previous trading day.

Inventory side, aluminum ingot inventory in major consumption areas increased by 16,500 mt WoW on Wednesday, with all three regions showing inventory buildup. In the short term, high aluminum prices may continue to suppress end-use demand, aluminum ingots still face inventory buildup risks, and spot premiums/discounts are expected to remain under pressure.