Aluminium ingot inventory began to fall after more than half a month of build-up

As of November 16, 2023, according to SMM statistics, China's aluminum ingot social inventory was 677,000 mt, down 17,000 mt from November 13 and 11,000 mt WoW, up 130,000 mt YoY. After more than half a month of inventory buildup, the aluminum ingot inventory finally started to decrease mid-week in the second half of November, easing the excess inventory pressure and temporarily stabilizing under the 700,000 mt. Despite being the first day of futures contract rollover, the short-term inventory reduction didn't seem to stimulate market price, and SHFE aluminum price remained relatively weak throughout the day. China's aluminum ingot inventory remains at an absolute peak for the second half of 2023 and a historical high for the same period over the past two years. SMM predicts the coming week as critical in determining whether the destocking would sustain. The subsequent inventory trend is expected to see a mid-November increase, albeit not significant, stabilizing around 700,000 mt, and possibly briefly exceeding 700,000 mt. By late November, an inventory reduction turning point is anticipated, with South China starting this phase earlier than Wuxi and Gongyi. If this turning point arrives early, transitioning into the year-end inventory reduction phase and maintaining a stable reduction rate, SMM estimates that by November end, domestic aluminum ingot inventory could fall to around 600,000-650,000 mt, and decrease to about 550,000-600,000 mt by December end.