SMM August 20:
Futures extended their decline today, while spot in South China remained stable to firm. The cumulative decline in absolute prices was already substantial, clearly breaking below the monthly average. Combined with inventory continuing to destock steadily and the single-day decline being sizable, these two tailwinds prompted widespread holding back from selling among cargo holders, with price cuts and concessions almost disappearing. Mainstream quotations were at a premium of 0 to +10 yuan/mt, with the center steadily moving upward, and liquidity noticeably tightened. Demand side, downstream took advantage of low prices to continue ramping up restocking, providing solid bottom support for demand. With circulating cargo already limited, traders attempted to push for lower prices to take in cargo but found it hard to source cheap lots. They eventually had to turn to actively absorbing cargo at flat prices, and even accepted small premiums without hesitation. The supply-demand pattern tightened, and overall transaction feedback was positive. Spot transaction prices centered around the SHFE aluminum 2609 contract at a premium of 75 yuan/mt to 115 yuan/mt.
