Aluminum billets inventories fell below 200,000 mt

As the disturbance on aluminum billets supply in Guangxi persisted, arrivals of aluminum billets in south China decreased significantly since the middle of last week, dragging down the total social inventories across five major regions to below 200,000 mt. According to SMM statistics, the domestic social inventory of aluminium billets on May 16 was 193,200 mt, down 17,900 mt WoW, and down 7,000 mt from May 13. After Labour Day holiday, inventories of aluminum billets increased first and then decreased, falling by nearly 40,000 mt. After mid-May, destocking performance were better than expected. Although inventories still stayed at a high level in the same period of the past four years, the gap with the same period last year narrowed to 30,500 mt.

In Guangxi, some aluminum billet factories in Tianlin and Debao maintained stable production after the holiday, while some have cut production or plan to do so in the future . It is worth noting aluminum billets factories in Tianyang remained closed before and after Labour Day holiday. However, some local billets factories restarted in the week, and the inflows into warehouses in Foshan gradually returned to normal. The arrivals in the three days of the week increased by nearly 6,000 mt, up 100% WoW. As aluminum prices hit a new high since May, aluminum billets processing fees pulled back after an initial rise in the week. The processing fees of φ120 aluminum billets in Wuxi and Foshan were 180 yuan/mt and 200 yuan/mt on May 16, down 20 yuan/mt and 80 yuan/mt respectively. The processing fees in Nanchang were sluggish, with large billets only reported at 80 yuan/mt, down 70 yuan/mt WoW. SMM predicts that it is difficult for processing fees to find solid support, which may remain low in May.