Aluminum billet inventory fell to 139,500 mt, warehouse withdrawals recovered, and processing fees came under pressure across the board. According to SMM statistics, aluminum billet inventory in mainstream domestic consumption areas registered 139,500 mt on August 27, down 5,000 mt from last Monday and down 3,500 mt from last Thursday, ending the previous continuous inventory buildup trend and shifting to a slight decline during the week. Compared with the same period, inventory was 5,500 mt higher than in 2025, 29,400 mt higher than in 2024, and 69,900 mt higher than in 2023, with total inventory remaining at a relatively high level for recent years. From the perspective of warehouse withdrawals, 36,500 mt of aluminum billets were withdrawn from warehouses during August 17–24, up sharply by 6,200 mt WoW. Market trading activity notably recovered, mainly driven by the decline in the center of aluminum prices last week, which spurred accelerated downstream purchases. The slight week-on-week decline in aluminum billet inventory was driven by two factors: firstly, recent warehouse inflows were low, with the pace of arrivals slowing across regions, and supply-side inflows fell short of expectations; secondly, the lower center of aluminum prices last week stimulated concentrated downstream procurement, leading to a recovery in warehouse withdrawals and driving a modest destocking. Specifically, in Foshan, a significant decline in arrivals pushed inventory down to 62,500 mt, making it the primary driver of the overall inventory decline; in Wuxi, increased arrivals led to a slight buildup to 25,500 mt. However, the upward trend in aluminum billet inventory buildup has not been reversed. Upstream operating rates at aluminum billet producers are gradually rising, capacity in Yunnan continues to be released, and the supply side still exhibits growth. Under an oversupply situation, inventory is expected to shift back to a buildup next week, and attention should be paid to changes in downstream purchasing sentiment and operating rates at aluminum billet producers.
This week, the center of aluminum prices stopped falling and rebounded. SMM A00 spot aluminum prices rose from 23,600 yuan/mt last Thursday to a high of 23,920 yuan/mt this week, an overall increase of about 320 yuan/mt from last Thursday. Against the backdrop of rebounding aluminum prices, downstream wait-and-see sentiment intensified, market demand weakened, and processing fees for aluminum billets across all regions dropped sharply overall. During the week, they exhibited a trend of consolidating and then pulling back before accelerating to hit bottom. By region, in Foshan, φ90 aluminum billet processing fees were quoted at 140 yuan/mt and φ120 at 90 yuan/mt, both down 170 yuan/mt from last Thursday; in Wuxi, φ90 was quoted at 320 yuan/mt and φ120 at 240 yuan/mt, down 240 yuan/mt and 260 yuan/mt, respectively; in Nanchang, φ90 was quoted at 200 yuan/mt and φ120 at 150 yuan/mt, both down 250 yuan/mt. Processing fee trends diverged markedly during the week: in Foshan, as aluminum prices rebounded and downstream wait-and-see sentiment rose, processing fees fell significantly, with φ120 dropping to a low of 90 yuan/mt; in Wuxi, there was a sentiment to hold prices firm early in the week, but as supply expanded and demand weakened, the decline in processing fees widened significantly, with φ120 down 260 yuan/mt from last Thursday, leading the decline. With the oversupply situation persisting and operating rates at billet producers gradually rising, the supply side continues to expand. It is expected that next week, aluminum billet processing fees will remain under pressure at current levels, with further downside room. Attention should be paid to arrival situations in each region and the transmission of aluminum price trends to processing fees.
![Aluminum Billet Inventory Drops to 139,500 mt, Warehouse Withdrawals Recover, Processing Fees Under Pressure Across the Board [SMM Analysis]](https://imgqn.smm.cn/usercenter/yOYEC20251217171653.jpg)
