SHANGHAI, Jun 9 (SMM) – Aluminium ingot inventory across China’s eight major markets stood at 553,000 mt as of June 8, down 43,000 mt from a week ago and 300,000 mt from a year ago. In south China, cargo arrivals increased less than expected, while outflows from warehouses fell only slightly, driving down local stocks rapidly. Wuxi saw no significant increase in arrivals and noticeable improvement of consumption, allowing the region to lead the inventory decline. Inventory in Gongyi also declined, easing local inventory pressure. After a sharp drop on Monday, SHFE aluminium basically stabilised in the following three days. The price difference between east and south China narrowed. On the whole, aluminium ingot outflows from social warehouses are estimated to have increased on a weekly basis. Cargo arrivals were far fewer than previously anticipated, driving the inventory decline to accelerate and keeping the inventory at the lowest compared to the same period of past five years.
Judging from cargoes in transit and the low share of aluminium ingot output at smelters, aluminium ingot inventory is expected to remain in a downward trend. However, the destocking may slow down as cargoes from Xinjiang will keep arriving. It’s worth noting that the destocking of aluminium ingots was mainly driven by lower proportion of ingot output at smelters rather than strong consumption. SMM sees aluminium ingot social inventories at around 500,000 mt at the end of June.
