High Inventory Levels Suppressed Downstream Buying Sentiment, Spot Premiums Under Pressure [SMM Spot Aluminum Midday Review]

SMM April 13 update:

SHFE aluminum 2604 fluctuated downward in the morning session, with the price center moving lower than the previous day. Affected by some futures-spot warrant shipments, overall selling sentiment in the market was relatively high, circulating supplies were fairly sufficient, and market transactions declined after the opening. Transactions were mainly concentrated around SMM A00 aluminum at a discount of 10 yuan/mt to the average price. East China market shipment sentiment index was 3.41 today, up 0.17 MoM; purchasing sentiment index was 3.01, flat MoM.

Aluminum futures prices pulled back today. Combined with persistently high inventory levels in central China, traders and downstream processing enterprises held pessimistic expectations for price increases. Overall buying sentiment in the market was poor, and suppliers tended to engage in price collapse shipments in bulk when the price spread between central China and east China was relatively small, driving market quotes lower throughout the day. Ultimately, overall quotes in the central China market fell from a premium of 20 yuan to a discount of 10 yuan against the central China price. Central China market shipment sentiment index was 2.77 today, up 0.01 MoM; purchasing sentiment index was 2.4, down 0.04 MoM.

Inventory side, aluminum ingot inventory in major consumption regions increased by 8,500 mt MoM today, with all three regions showing inventory buildup.