SMM, March 12
— Boosted by the overseas market and continuous destocking in the domestic aluminum market, bullish sentiment was stimulated. SHFE aluminum showed a clear upward trend in the morning session, with the center of the nearby contract moving higher. Bullish sentiment was strong in the spot market, and suppliers stood firm on quotes.
Specifically, trading activity was active among traders in east China, but the rapid rise in aluminum prices made it difficult for spot discounts to narrow. Today, SMM A00 aluminum ingot was at a discount of 40 yuan/mt against the SHFE 2503 contract, with SMM A00 aluminum ingot prices recorded at 20,900 yuan/mt, up 190 yuan/mt from the previous trading day. In central China, transactions were moderate today. Although downstream safety-related production restrictions have ended, enterprises still held inventories. Considering the high aluminum prices, enterprises mainly focused on digesting their inventories. Transactions in central China were mostly on par with SMM central China prices. SMM central China A00 aluminum ingot was recorded at 20,780 yuan/mt against the SHFE 2503 contract, up 180 yuan/mt from the previous trading day, with the Henan-Shanghai price spread at -120 yuan/mt.
In terms of inventory, according to SMM data on domestic aluminum ingot social inventories across three regions, the inventory in major domestic consumption areas stood at 724,500 mt on March 12, down 1,600 mt from the previous trading day. In the short term, destocking in major consumption areas and optimistic expectations for downstream demand are expected to support aluminum prices. Combined with the fact that downstream buyers are still purchasing as needed, spot premiums and discounts may fluctuate.
Source: SMM
