This morning, aluminum prices stabilized near the daily average of 20,800 yuan/mt. In the spot market, restocking effects in east China over the weekend improved trading, but downstream enterprises faced high aluminum prices, limiting their restocking efforts, with premiums facing some resistance. The market traded SMM A00 at parity to around 10 yuan/mt. SMM A00 was at a discount of 30 yuan/mt against SHFE 2504 contract, up 10 yuan/mt from the previous trading day, and SMM A00 aluminum ingot prices were recorded at 20,790 yuan/mt, down 20 yuan/mt from the previous trading day.
In the central China market, due to the previous decline in aluminum prices, downstream restocking increased, leading to destocking growth in the central China market, boosting supplier confidence. Most suppliers held back from selling, expecting higher prices, and premiums remained firm during the day. However, as prices rebounded to higher levels, downstream buying interest decreased, and trading activity clearly declined. SMM central China A00 was recorded at 20,670 yuan/mt against SHFE 2504 contract, down 30 yuan/mt from the previous trading day, with the price spread between central China and SHFE at -120 yuan/mt. Actual market transactions were at parity to a discount of around 10 yuan/mt against SMM central China prices.
Regarding inventory, SMM's daily aluminum social inventory was recorded at 696,200 mt, down 4,900 mt. After the center of aluminum prices shifted downward, downstream restocking increased, accelerating destocking across the country, and market premiums became firmer. Under the peak season expectations of March and April, high aluminum prices will gradually be absorbed by downstream consumers, but in the short term, as aluminum prices rebound to higher levels, the premiums in the spot market face some pressure.
