Activity in the East China Market Declined, While the Central China Market Edged Higher [SMM Spot Aluminum Midday Review]

SMM January 13:

In the morning session, the SHFE aluminum 2602 contract fluctuated downward, with the price center lower than the previous trading day. High aluminum prices suppressed downstream procurement demand, and overall buyer transaction sentiment declined WoW from the previous trading day. Mainstream transaction prices mainly ranged from a discount of 150 yuan/mt to a discount of 130 yuan/mt against the 2602 contract. Today, the east China market selling sentiment index was 2.59, down 0.05 WoW; the purchasing sentiment index was 2.49, down 0.25 WoW. SMM A00 aluminum closed at 24,300 yuan/mt, down 40 yuan/mt from the previous trading day, at a discount of 60 yuan/mt against the 2601 contract, up 40 yuan/mt from the previous trading day; at a discount of 150 yuan/mt against the 2602 contract.

Today, sentiment in the central China market slightly recovered, with the range of premiums and discounts narrowing. Trading firms engaging in both spot and futures markets showed increased willingness to sell, spot aluminum supply circulation was relatively loose, and holders demonstrated a strong willingness to hold prices firm, leading to relatively stable market prices. Final actual transaction prices in the central China market ranged from a discount of 10 yuan/mt to a premium of 10 yuan/mt against the central China price. Today, the central China market selling sentiment index was 2.59, up 0.01 WoW; the purchasing sentiment index was 1.5, up 0.1 WoW. SMM central China price closed at 24,140 yuan/mt, down 40 yuan/mt from the previous trading day, at a discount of 220 yuan/mt against the 2601 contract, up 40 yuan/mt from the previous trading day; at a discount of 310 yuan/mt against the 2602 contract. The price spread between Henan and Shanghai was -160 yuan/mt, flat from the previous trading day.

Inventory side, aluminum ingot inventory in major consumption areas increased by 7,000 mt WoW on Wednesday, with Wuxi being the main location for 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.