Aluminium ingot inventory is close to 700,000 mt

As of November 9, 2023, SMM data shows China's aluminium ingot inventory at 688,000 mt, up 3,000 mt from Nov 6 and 31,000 mt from Nov 2, and 112,000 mt higher YoY. The week ending November 9 saw continued inventory rise, reaching the highest level in H2 2023 and a three-year same-period record high. Despite inventory surges since the National Day holiday, SMM predicts a decrease in aluminium in transit in Wuxi, Gongyi, and Yunnan due to reduced production and after release of backlogged inventory in Xinjiang. Foshan may be the first major consumption area to see inventory decline. Year-end peak aluminium demand is nearing. The early inflection point of aluminium billet inventory may ease the aluminium billet market supply-demand, potentially increasing aluminium billet production and molten aluminium proportion, thereby decreasing casting ingot volume and alleviating aluminium ingot supply and delivery pressure. SMM forecasts that in early November, aluminium ingot inventories may slightly rise, stabilizing around 700,000 mt. Inventory reduction is expected in late November, with South China starting inventory reduction earlier than Wuxi and Gongyi. If the reduction occurs smoothly and maintains a stable pace, SMM estimates November’s end aluminium ingot inventory to drop to 580,000-630,000 mt, and further decrease to 500,000-550,000 mt by December’s end.