SMM January 22:
SHFE aluminum 2602 contract pulled back in early trading and then fluctuated with a rebound, with the price center slightly higher than the previous trading day. Today, overall market buying sentiment improved slightly but remained at a low level. Mainstream transaction prices were mainly within a discount of 10 yuan/mt to a premium of 10 yuan/mt. The east China market selling sentiment index was 2.93, up 0.04 MoM; the buying sentiment index was 2.50, up 0.04 MoM. SMM A00 aluminum closed at 23,740 yuan/mt, up 30 yuan/mt from the previous trading day, at a discount of 150 yuan/mt against the 2602 contract, flat from the previous day.
As road transport gradually recovered after the heavy snow ended in Henan, trading in the central China market continued to recover. Downstream processing enterprises and traders showed stronger buying sentiment, and aluminum prices plunged quickly after the market opened, supporting spot premiums/discounts to remain high. Final actual transaction prices in the central China region ranged from parity to a premium of 30 yuan/mt against the central China price. The central China market selling sentiment index was 2.70, up 0.02 MoM; the buying sentiment index was 2.27, up 0.06 MoM. SMM central China price closed at 23,650 yuan/mt, up 40 yuan/mt from the previous trading day, at a discount of 240 yuan/mt against the 2602 contract, up 10 yuan/mt from the previous day. The Henan-Shanghai price spread was -90 yuan/mt, narrowing by 10 yuan/mt from the previous day.
Inventory side, aluminum ingot inventory in major consumption areas decreased by 10,000 mt MoM today, with destocking seen in both Wuxi and Gongyi. 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.
