Production restrictions in central China downstream for environmental protection Partial restocking in east China downstream [SMM Spot Aluminum Noon Review]

Published: Jan 27, 2026 14:28

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SMM January 27:

SHFE aluminum 2602 fluctuated downward in the morning session, with the price center lower than the previous trading day. Overall market trading sentiment remained subdued today. Due to high aluminum prices, traders primarily focused on selling; some downstream smelters restocked today, but overall acceptance of high-priced aluminum remained low, and the mainstream spot discount widened. The mainstream transaction range was between a discount of 20 yuan/mt to a discount of 10 yuan/mt. The east China market selling sentiment index was 2.83 today, down 0.07 WoW; the buying sentiment index was 2.39, up 0.03 WoW. SMM A00 aluminum closed at 23,870 yuan/mt, down 160 yuan/mt from the previous trading day, at a discount of 170 yuan/mt against the 2602 contract, down 10 yuan/mt from the previous trading day.

Trading sentiment in the central China market continued to weaken slightly today. Downstream processing enterprises, affected by environmental protection-driven production restrictions, saw a significant drop in purchase volume, with restocking mainly for rigid demand only. Meanwhile, major holders sold heavily, keeping transaction prices low. Only some traders held prices firm. Transaction prices were concentrated between a discount of 10 yuan/mt to the central China price and a discount of 40 yuan/mt to the central China price. The central China market selling sentiment index was 2.82 today, down 0.01 WoW; the buying sentiment index was 2.15, down 0.13 WoW. SMM central China aluminum closed at 23,760 yuan/mt, down 180 yuan/mt from the previous trading day, at a discount of 280 yuan/mt against the 2602 contract, down 30 yuan/mt from the previous trading day. The Henan-Shanghai price spread was -110 yuan/mt, widening by 20 yuan/mt from the previous trading day.

Inventory side, aluminum ingot inventory in mainstream consumption areas increased by 5,500 mt WoW today, with inventory buildup seen in all three regions. In the short term, high aluminum prices may continue to suppress end-use demand, and aluminum ingots still face inventory buildup risks. Spot premiums/discounts are expected to remain under pressure.

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