Aluminum Prices Rise Sharply, with Strong Selling Sentiment [SMM Spot Aluminum Midday Commentary]

SMM, March 5:

In early trading, SHFE aluminum 2603 fluctuated upward, with the price center higher than the previous trading day. Affected by the US-Iran conflict, aluminum prices continued to rise. Impacted by high aluminum prices, buying sentiment declined today, while selling sentiment increased. The spot-futures price spread was currently relatively strong, and some traders were still purchasing for hedging. Bullish sentiment was strong in the market, and sellers held prices firm. Today’s mainstream transaction prices were from the average price to +10 yuan/mt. Today, the east China market’s shipping sentiment index was 2.98, up 0.3 MoM; the purchasing sentiment index was 2.96, down 0.23 MoM.

Geopolitical conflict affected shipments from Aluminium Bahrain, exacerbating sentiment around financial constraints. Traders in the central China market remained bullish. Although downstream processing enterprises were constrained by weaker-than-expected orders and inventories not yet fully depleted, resulting in relatively weak purchasing sentiment, traders’ purchases boosted overall market transactions, and premiums remained relatively firm. Ultimately, actual transaction prices in the central China market ranged from central China price +10 yuan to central China price -30 yuan, with mainstream transaction prices concentrated at central China price -10 yuan to -20 yuan. Today, the central China market’s shipping sentiment index was 2.77, up 0.07 MoM; the purchasing sentiment index was 2.4, up 0.08 MoM.

Inventory side, aluminum ingot inventory in major consumption areas increased 13,000 mt MoM today. Affected by seasonality, all three regions saw inventory buildup. In the short term, aluminum ingots continued to see seasonal inventory buildup after the Chinese New Year. Affected by bullish market sentiment, premiums are expected to remain on a narrowing trend.