SMM, February 6:
Due to the pressure on liquid aluminum conversion during the Chinese New Year, some aluminum plants in certain regions offered concessions to aluminum billet manufacturers, enabling them to maintain production rhythm during the holiday and alleviate the pressure of liquid aluminum write-offs. However, this led to a rapid accumulation of aluminum billets, with post-holiday aluminum billet inventory on the first day already approaching last year's post-holiday peak. It is expected that aluminum billet inventory at high levels will operate between 300,000-350,000 mt. Regarding processing fees, market trading sentiment remained weak. On one hand, aluminum billets continued to face resistance; on the other hand, domestic profile enterprises were still in the process of resuming operations, resulting in weak purchasing strength in the market. Although suppliers showed some sentiment to stand firm on quotes, the market largely exhibited a trend of price suppression in transactions. Processing fees saw a slight rebound overall, but trading volume remained low.
SMM February 6 News:
Regarding aluminum billet inventory, according to SMM statistics, as of February 5, 2025, domestic aluminum billet social inventory was 275,000 mt, an inventory buildup of 51,000 mt compared to pre-holiday levels (January 27), representing an increase of 22.8%. On a YoY basis, during last year's Chinese New Year, domestic aluminum billet inventory buildup was 62,000 mt, with this year's increase and growth rate both lower than the same period last year. Over the past seven years, the average inventory buildup during the Chinese New Year holiday was 47,000 mt, and this year's buildup exceeded the recent average; however, the growth rate of this year's domestic aluminum billet inventory was within the average range of recent years.
Due to pressure on liquid aluminum conversion during the Chinese New Year holiday, some aluminum plants in certain regions offered discounts to aluminum billet manufacturers, enabling them to maintain production rhythm during the holiday and alleviate the pressure of liquid aluminum clearance. However, this led to a rapid accumulation of aluminum billets, with post-holiday inventory on the first day already approaching last year's post-holiday peak. It is expected that aluminum billet inventory at high levels will operate in the range of 300,000-350,000 mt.
In terms of processing fees, market trading sentiment remained weak. On one hand, aluminum billets continued to face resistance; on the other hand, domestic profile enterprises were still in the process of resuming operations, resulting in weak purchasing momentum. Although suppliers showed a sentiment to stand firm on quotes, the market generally exhibited a trend of price suppression in transactions. Overall, processing fees saw a slight rebound, but trading volume remained low.
By region, Foshan saw an inventory buildup of 16,600 mt to 117,000 mt, slightly higher than last year's buildup of 14,400 mt. The processing fee for φ120 aluminum billets was reported at 160 yuan/mt, up 40 yuan/mt from pre-holiday levels on January 27. In Wuxi, trading progress was relatively slow, with the processing fee for φ120 aluminum billets at 170 yuan/mt, up 20 yuan/mt from January 27. In Nanchang, processing fees remained within an adjustment range, with the market processing fee for φ120 aluminum billets at 200 yuan/mt, up 20 yuan/mt from January 27.
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