East China Trading Sentiment Strengthens, Central China Remains Weak [SMM Spot Aluminum Midday Review]

SMM, July 7:

In morning trading, the trading center of the SHFE aluminum 2606 contract was higher than that of the previous trading day at the same time. Selling sentiment in the market strengthened MoM today, as some downstream players anticipated higher short-term aluminum prices, leading to slightly improved buying sentiment. Downstream price acceptance also rose MoM from yesterday. Mainstream transactions settled at parity to a premium of 10 yuan/mt against the SHFE aluminum July contract. The selling sentiment index in east China stood at 3.01 today, up 0.02 MoM, while the buying sentiment index was 2.80, up 0.01 MoM.

As aluminum futures continued to rebound, downstream processing enterprises in central China maintained a low willingness to take orders amid high inventory and weak orders, with only some companies making small-volume purchases to meet rigid demand. Suppliers showed no obvious intention to hold prices firm initially, but later strengthened their stance, leading to a recovering trend in market discounts. Ultimately, the actual transaction price range in central China centered around a discount of 90-110 yuan/mt against the SHFE aluminum 2607 contract. The selling sentiment index in central China was 2.89 today, down 0.01 MoM, while the buying sentiment index stood at 2.1, down 0.01 MoM.

On the inventory front, aluminum ingot stocks in major consumption areas fell by 0.25 MoM today, with destocking mainly seen in Guangdong and Wuxi.