SMM

Last week's nearly 1,000 yuan decline in aluminum prices effectively spurred downstream restocking activities. Coupled with the rush for exports and production before December 1, SMM statistics showed that last week's domestic aluminum ingot weekly outflows from warehouses increased significantly by 12,900 mt to 125,000 mt. With this week's outflows expected to continue rising and in-transit cargoes yet to arrive in large quantities, domestic aluminum ingot inventory continued to hit new lows for H2. As of November 21, 2024, SMM statistics showed domestic aluminum ingot social inventory at 539,000 mt, a significant destocking of 26,000 mt compared to Nov 14. On a YoY basis, current domestic aluminum ingot inventory decreased by 125,000 mt but still failed to maintain the advantage of the lowest level in the past five years. According to an SMM survey, as we approach late November, multiple sources indicate that recent shipments from Xinjiang show signs of continued improvement. Concentrated arrivals in Gongyi and Wuxi may intensify next week. Coupled with the limited sustainability of off-season aluminum ingot outflows, SMM temporarily believes that the inventory inflection point for aluminum ingots may appear next week or in the first week of December. The support for aluminum prices from low inventory may gradually weaken. Domestic aluminum ingot inventory is expected to hover around 500,000-600,000 mt, with the risk of inventory buildup increasing, potentially returning to around 600,000 mt in early December.