SHANGHAI, Sep 15 (SMM) -
Aluminium ingot: The aluminium ingot social inventories across China’s eight major markets totalled 675,000 mt as of September 15, up 3,000 mt from last Thursday, but down 21,000 mt from this Tuesday. The figure was also 93,000 mt lower than a year ago and 4,000 mt below that at the end of August. After the Mid-Autumn Festival, trading activities in many regions improved. Wuxi, Foshan and Gongyi maintained the destocking. Some traders in Wuxi were more willing to purchase due to optimism over future spot premiums. While production reductions in Sichuan and Yunnan resulted in fewer arrivals in Foshan, local downstream consumption declined, thus the inventory drop was limited. Inventory in Gongyi fell thanks to improved downstream purchases. The output cuts by smelters in Yunnan may expand to 20-30%. As such, aluminium inventory is likely to remain at a low level in September.
Aluminium billet: The domestic aluminium billet social inventory dropped 2,700 mt from a week ago to 114,900 mt as of September 15. Inventory in Foshan reversed the previous upward trend and fell 4,900 mt or 6.27%, driven by fewer arrivals from Yunnan and post-holiday downstream restocking. Inventories in Wuxi and Changzhou dropped 600 mt and 400 mt respectively amid rigid demand. In contrast, inventories in Huzhou and Nanchang added 2,000 mt and 1,200 mt respectively due to stable arrivals and poor downstream demand. The orders received by downstream enterprises have barely improved so far this month. Downstream producers will become more willing to stockpile due to fears that the potential output cuts in Yunnan will push up aluminium prices. As such, aluminium billet social inventory may maintain a slight decline in the short term.
