SMM December 26 -
In the early trading session, the most-traded SHFE aluminum contract fluctuated rangebound. Aluminum prices remained at low absolute levels, coupled with low inventory, while downstream buying sentiment stayed relatively strong. Specifically, in east China, suppliers saw a decline in their inventories, and improved downstream buying sentiment narrowed the discount against the futures market to around 10 yuan/mt against the SMM average price. Today, the SMM A00 aluminum ingot recorded a discount of 30 yuan/mt against the SHFE aluminum 2501 contract, up 10 yuan/mt from the previous trading day. The SMM A00 aluminum ingot price stood at 19,820 yuan/mt, down 10 yuan/mt from the previous trading day. As the year-end approaches, market transactions, including shipments and purchases, may decrease. SMM will continue to monitor subsequent transaction performance and the signing of new long-term contracts.
In the central China market, spot aluminum prices have been operating at low absolute levels recently. Suppliers' inventories have declined, and the market's available circulating supply remains tight. The price spread between Henan and Shanghai held steady, with today's Henan-Shanghai price spread at a discount of around 70 yuan/mt. Market transactions reflected initial signs of weakening downstream demand, but low inventory levels provided price support. The SMM Central China A00 aluminum ingot price recorded 19,750 yuan/mt, down 10 yuan/mt from the previous trading day, with actual market transactions mainly on par with the SMM Central China price.
Regarding inventory, according to SMM's domestic aluminum social inventory data, as of December 26, daily destocking reached 13,000 mt, bringing the total inventory to 490,000 mt. Recently, aluminum prices have seen a downward shift in their center, prompting downstream buyers to purchase new orders at lower prices, which facilitated inventory destocking nationwide. After the rebound in premiums and discounts, they stabilized. However, as aluminum prices rebound, the pace of downstream raw material inventory consumption may slow. It is expected that east China will continue to maintain a discount trend next week.
Data Source: SMM
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