Spot Aluminum Prices Exceed 20,000 as Spot Discounts Widen [SMM Spot Aluminum Midday Review]

SMM  January 13 -

In the early trading session, SHFE aluminum front-month contract fluctuated upward. Despite the continued destocking trend in social inventory, spot market transactions were moderate due to high absolute prices. Specifically, in east China, suppliers saw a decline in their inventories, while downstream buyers showed renewed resistance to high prices. Spot discounts were around 10 yuan/mt against SMM prices. Today, SMM A00 aluminum recorded a discount of 50 yuan/mt against the SHFE 2501 contract, down 10 yuan/mt from the previous trading day. SMM A00 aluminum ingot was quoted at 20,150 yuan/mt, up 170 yuan/mt from the previous trading day.

In the central China market, downstream demand weakened, but suppliers intended to stand firm on premiums due to low inventory levels, resulting in limited expansion of discounts. Today, the Henan-Shanghai price spread was around a discount of 50 yuan/mt. SMM central China A00 aluminum recorded 20,100 yuan/mt against the SHFE 2501 contract, up 160 yuan/mt from the previous trading day. Actual transactions in the market were mainly at SMM central China prices minus 10 yuan/mt to parity.

Regarding inventory, according to SMM domestic aluminum social inventory data, as of January 12, daily destocking reached 4,000 mt, bringing the total to 455,000 mt. Short-term continued destocking provided new support for firm quotes in the market. However, with subsequent increases in arrivals and downstream entering the Chinese New Year break, social inventory may shift to an inventory buildup. Regional premiums and discounts are expected to weaken accordingly.

Source: SMM

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