Short-term aluminum inventory pressure lingers due to poor outflows from warehouses, but optimism remains for September

After the turning point of domestic aluminium ingot destocking became clear last week, this week’s domestic aluminium ingot inventory performance was disappointing, showing continuous slight accumulation. The continuous decline in domestic aluminium inventory came to a halt, temporarily failing to cross the 800,000 mt mark. According to SMM statistics, as of August 29, 2024, the total social inventory of aluminium ingots was 811,000 mt, with domestic circulating aluminium inventory at 685,000 mt, up 8,000 mt WoW and 318,000 mt YoY. Regarding outflows, last week's outflows from warehouses decreased by 12,700 mt WoW to 103,700 mt. Last week, aluminium prices accelerated their rebound significantly, aggressively aiming to reclaim the 20,000 yuan/mt mark, which suppressed last week's domestic aluminium ingot outflows. Additionally, some "black swan" events in the spot trading circle last week made market trading sentiment more cautious, and it is expected that the market will still need some time to digest. This week’s aluminium ingot outflows remain under pressure. Particularly in the Foshan area, the previously active trading atmosphere was deeply suppressed, making it the most obvious region for inventory accumulation this week. Despite the influence of multiple factors, the short-term difficulty of domestic aluminium ingot destocking may increase. However, SMM expects that the turning point of domestic aluminium ingot inventory in the second half of August has been basically confirmed, and the inventory performance in September remains optimistic.