Futures Stopped Falling and Surged, Spot Aluminum Managed to Hold Firm [SMM South China Aluminum Spot Daily Commentary]

SMM, July 2:

The futures market stopped falling and surged today, while spot prices in South China struggled to stay firm. Spot-futures price spread expectations remained at relatively high levels, setting a tone of slightly ample circulation, and along with the rebound of absolute prices from lows prompting short-term speculative cargo to flow out and further supplement supply, suppliers' efforts to hold prices firm gradually weakened, with mainstream quotations at a premium of -10 to +10 yuan/mt, gradually declining. Demand side, downstream procurement pace remained largely unchanged, with considerable replenishments proceeding steadily but incremental volume insufficient; traders shifted from pushing for lower prices and a wait-and-see stance to partially increasing market purchases, and overall demand was not particularly weak. Momentum on both supply and demand sides was not prominent, and overall trading was tepid. Spot transaction prices were concentrated at a discount of 20 yuan/mt to a premium of 20 yuan/mt against the SHFE aluminum 2607 contract.