Morning SHFE Aluminum Rose Strongly, Market Premiums Continued to Widen [SMM Spot Aluminum Midday Commentary]

SMM, March 11:

SHFE aluminum 2603 strengthened in early trading, with the price center rising sharply from the previous trading day. Market sentiment for shipments increased, and buying sentiment also improved, but high aluminum prices suppressed downstream demand, leaving overall procurement demand still weak. Market premiums continued to decline from the opening. Today’s mainstream transaction prices were concentrated at discounts of 20 yuan/mt to the average price. Today, the east China market shipment sentiment index was 3.27, up 0.08 MoM; the buying sentiment index was 2.66, up 0.13 MoM.

Recently, the SHFE aluminum front-month contract fluctuated widely and rose sharply today. Buying sentiment among downstream processing enterprises in central China weakened, but traders’ bullish purchase sentiment provided slight support. Overall market trading volume declined from the previous two days, with a wait-and-see mood still dominating. In the end, the actual transaction price range in the central China market was around parity with the central China price to a discount of 20 yuan against the central China price. Today, the central China market shipment sentiment index was 2.64, up 0.06 MoM; the buying sentiment index was 2.34, down 0.08 MoM.

Inventory side, aluminum ingot inventory in major consumption regions increased by 2,500 mt MoM today, with Guangdong as the main source of the inventory buildup. In the short term, after the Chinese New Year, aluminum ingot continued its seasonal inventory buildup. Affected by bullish market sentiment, premiums are expected to remain on a narrowing trend.