Transaction sentiment in East China and Central China strengthened, with the range of premiums and discounts narrowing across the board. [SMM Spot Aluminum Midday Review]

SMM January 16:

SHFE aluminum 2602 contract fluctuated in the morning session, with the price center lower than the previous trading day. Affected by the decline in aluminum prices, overall downstream purchase sentiment recovered, and mainstream transaction prices mainly ranged from parity to a premium of 20 yuan/mt. Today, the east China market selling sentiment index was 2.61, up 0.04 WoW; the buying sentiment index was 2.55, up 0.11 WoW. SMM A00 aluminum closed at 24,030 yuan/mt, down 160 yuan/mt from the previous trading day, at a discount of 180 yuan/mt against the 2602 contract, down 10 yuan/mt from the previous trading day.

Today, the central China market continued to recover. Although downstream factories mainly restocked based on rigid demand, large traders actively purchased, accelerating the circulation of spot cargo. Holders held prices firm and were reluctant to sell, driving market prices higher. Eventually, actual transaction prices in the central China market rose, ranging from a discount of 10 yuan to a premium of 20 yuan against the central China price. Today, the central China market selling sentiment index was 2.67, up 0.07 WoW; the buying sentiment index was 2.25, up 0.30 WoW. SMM central China closed at 23,880 yuan/mt, down 150 yuan/mt from the previous trading day, at a discount of 330 yuan/mt against the 2602 contract, down 20 yuan/mt from the previous trading day. The Henan-Shanghai price spread was -150 yuan/mt, narrowing by 10 yuan/mt from the previous trading day.

Inventory side, aluminum ingot inventory in major consumption areas decreased by 1,500 mt WoW on Wednesday. Gongyi was the main area for inventory buildup, while Guangdong and Wuxi showed destocking trends. In the short term, high aluminum prices may continue to suppress end-use demand, aluminum ingot still faces inventory buildup risks, and spot premiums/discounts are expected to remain under pressure.