Aluminum Ingot Records Three Consecutive Declines, Spot Aluminum in South China Bucks the Trend and Strengthens, Aluminum Billet Processing Fees Turn Positive with Mild Improvement in Transactions [SMM South China Aluminum Spot Market Daily Review]

SMM Jan. 19:

In South China's aluminum ingot market, the SMM A00 aluminum (Foshan) average price was 23,900 yuan/mt on Jan. 19, down 160 yuan/mt on the day, at a discount of 130 yuan/mt against the front-month contract, narrowing 20 yuan/mt from the previous day.Against the backdrop of three consecutive sharp declines in aluminum prices, the spot market strengthened against the trend. Tight arrivals combined with weekend inventory drawdowns led suppliers to hold firm bullish sentiment, holding prices firm and reluctant to sell at lows. Offers steadily increased from 0 to +20 yuan/mt, and circulation gradually tightened. The price drop stimulated downstream users to increase restocking efforts, with traders and long-term contract buyers actively entering the market to purchase, boosting trading activity. Later, as futures prices fluctuated, buyers turned cautious and adopted a wait-and-see approach, resulting in few actual transactions.

In South China's aluminum billet market, on Jan. 19, the processing fees for various specifications of SMM 6063 aluminum billet (Guangdong) significantly rebounded. The average processing fee for Φ90/100 was 120 yuan/mt, and for Φ120 and above specifications was 70 yuan/mt, up 100 yuan/mt from the previous day.Processing fees ended the discount state, but offers varied. With the base price continuing to fall, downstream purchasing sentiment was cautious, with intentions only to restock at low prices and low acceptance of high-priced resources. Subsequent market offers were generally lowered, and overall transactions showed limited improvement.