Suppliers' Shipment Sentiment Low, Downstream Processing Enterprises' Wait-and-See Sentiment Strong [SMM Spot Aluminum Midday Comment]

SMM Jun 24:

The morning session saw the SHFE aluminum 2606 contract trade with a center lower than the same period of the previous trading day. As aluminum prices declined, the release of stockpiling demand from earlier price drops, combined with pervasive bearish sentiment, kept overall buying interest weak today. Transaction prices continued to move lower, with mainstream trades at a discount of 30-50 yuan/mt against the SHFE aluminum July contract. The east China shipment sentiment index stood at 2.98 today, down 0.13 DoD; the purchase sentiment index was 2.83, down 0.24 DoD.

The morning session today corrected sharply from yesterday, with central China traders raising their offers. Given the low prices, suppliers showed weak selling sentiment and a notable willingness to hold prices firm and hold back from selling. Downstream processing enterprises displayed clear fear of further declines, strong wait-and-see sentiment, and consequently weaker buying interest. Ultimately, actual transaction prices in the central China market centered around a discount of 60-90 yuan/mt against the SHFE aluminum July contract. The central China shipment sentiment index was 2.93 today, down 0.02 DoD; the purchase sentiment index was 2.20, down 0.01 DoD.

On the inventory front, aluminum ingot stocks in major consuming regions fell by 1.65 WoW today, with all three regions showing destocking.