Recently, shipments from Xinjiang have been affected by coal supply guarantees, reducing in-transit volumes. Additionally, the domestic market is in the midst of long-term contract negotiations, limiting arrivals in various regions. As a result, domestic aluminum ingot destocking accelerated mid-week. According to SMM statistics, as of December 19, 2024, domestic aluminum ingot social inventory stood at 528,000 mt, with a circulating inventory of 402,000 mt, down 29,000 mt WoW. Notably, Foshan has been in a nearly two-month continuous destocking phase since mid-to-late October, with inventory cumulatively decreasing by nearly 100,000 mt. Why has the south China market maintained stable destocking during the year-end off-season? SMM attributes this to the following reasons: 1. Supply-side pressure eased: In addition to factors such as backlog in Xinjiang, reduced casting ingot production, and lower warehouse inflows, SMM surveys indicate that several aluminum plants in the three south-west China provinces have already exceeded their annual sales targets ahead of schedule, significantly slowing the pace of aluminum ingot shipments. 2. Demand in south-west China has been generally strong this year. Chongqing has also entered a continuous destocking phase, with stable outflows from warehouses, leading to a redistribution of aluminum ingot supply from regions like Yunnan. SMM expects domestic aluminum ingot inventory to hover around 500,000-600,000 mt in December, with the inventory turning point likely to delay until the end of December.
Aluminum Ingot Inventory Turning Point Likely to Delay to the End of December
- Dec 20, 2024, at 4:13 pm
- SMM
Recently, shipments from Xinjiang have been affected by coal supply guarantees, reducing in-transit volumes.