Aluminum Prices Dropped Sharply, Spot Market Remained Weak [SMM Spot Aluminum Midday Review]

SMM May 7 update:

The SHFE aluminum 2605 contract fluctuated downward in early trading, with the overall price center moving lower compared to the previous trading day. Current invoicing constraints led to a contraction in market trade shipments. Downstream buyers adopted a stronger wait-and-see sentiment today, with purchase willingness cooling. Dragged by weak spot buying, mainstream transactions in the market were concentrated around SMM A00 aluminum minus 10 yuan/mt to the average price. Today, the east China market shipment sentiment index was 2.65, down 0.01 MoM; the purchase sentiment index was 2.6, down 0.2 MoM.

The trading atmosphere in the central China market weakened further compared to the previous day, with overall invoicing quotas continuing to decline and insufficient market trading confidence. Buyers mostly concentrated between 8:00 and 8:30 AM. Suppliers initially showed strong willingness to hold prices firm, but subsequent transactions were sluggish, with quotes trending lower. Transaction prices for invoiced shipments on the day were slightly higher than normal shipments. The actual transaction price range in the central China market was concentrated between central China price plus 20 yuan and central China price minus 10 yuan, with mainstream transactions at central China price plus 10 yuan. Today, the central China market shipment sentiment index was 2.82, down 0.01 MoM; the purchase sentiment index was 2.27, down 0.01 MoM.

Inventory side, aluminum ingot inventory in major consumption areas fell 0.35 WoW today, with all three regions showing a destocking trend.