Downstream Demand Has Yet to Recover, and Market Transactions Continued to Decline [SMM Spot Aluminum Midday Review]

SMM News, March 13:

The SHFE aluminum 04 contract fluctuated at highs after opening today. High aluminum prices suppressed downstream demand, and overall procurement demand remained weak, with market premiums continuing to soften. Market premiums kept declining from the open. Today’s mainstream quotations and transaction prices were concentrated between minus 20 yuan/mt and the average price. Today, the east China market shipments sentiment index was 3.32, flat MoM; the buying sentiment index was 2.55, down 0.02 MoM.

Today, trading sentiment in the central China market remained sluggish. As the weekend approached, market buying sentiment improved slightly, but constrained by high aluminum prices, downstream processing enterprises still showed low enthusiasm for picking up goods, and actual trading volume was limited, with only traders restocking when premiums fell to low levels. Ultimately, actual transaction prices in the central China market were around on par with the central China price to a discount of 20 yuan/mt against the central China price. Today, the central China market shipments sentiment index was 2.67, flat MoM; the buying sentiment index was 2.34, down 0.02 MoM.

Inventory side, aluminum ingot inventory in major consumption regions increased 4,000 mt MoM today, with Guangdong and Wuxi as the main sources of the inventory buildup. In the short term, aluminum ingot continued to see seasonal inventory buildup after the Chinese New Year, and affected by bullish sentiment, premiums are expected to remain on a narrowing trend.