According to SMM statistics, as of June 16, the inventory of aluminum ingots at major domestic consumption areas stood at 458,000 mt, a decrease of 2,000 mt from last Thursday and a decrease of 19,000 mt from last Monday on a WoW basis. By mid-June, destocking of aluminum ingots in China slowed significantly this week. Driven by regional price spreads and inter-regional transfers, arrivals in east China's Shanghai, Wuxi, and central China's Gongyi areas increased notably over the weekend. Meanwhile, inventory in south China's Foshan area dropped sharply, while inventory in other domestic regions remained largely stable.
SMM believes that supported by the still relatively low overall domestic casting ingot production in the short term, inventory is expected to continue its destocking trend. However, due to the slight increase in shipments from north-west China and inter-regional transfers driven by price spreads in recent days, the increase in arrivals this week has exerted significant pressure on east China and central China. Coupled with the expectation that some aluminum plants will increase casting ingot production, the tight supply situation may ease. Looking ahead, destocking in China as a whole is expected to face slowing pressure in the second half of the month. Close attention should be paid to whether the annual low of 440,000 mt can be successfully broken before the off-season transitions to an inventory buildup trend, in order to further boost market sentiment.
