SHANGHAI, Dec 22 (SMM) -
Aluminium ingot: SMM aluminium ingot social inventory stood at 475,000 mt as of Thursday December 22, down 7,000 mt from a week ago and down 41,000 mt from the end of November. It was down 416,000 mt from the same period last year. In detail, the inventory reduction was mainly contributed by Nanhai, where the inventory fell 5,000 mt WoW to 108,000 mt amid improving market transactions, and Wuxi, where the inventory fell 4,000 mt on a weekly basis as downstream players restocked after local aluminium prices fell. The inventory in other regions remained largely unchanged. Taking Gongyi as an example, the inventory was flat from a week ago as downstream consumption was muted, evidenced by expanding discounts. To sum up, aluminium ingot social inventory is expected to remain low. The market is likely to be contained by the relaxing pandemic control measures recently, and the attention shall be paid to the attendance of employees as well as the transportation capability.
Aluminium billet: SMM aluminium billet social inventory recorded 57,600 mt as of Thursday December 22, down 3,800 mt from a week ago which was largely contributed by Foshan. According to SMM research, a number of aluminium billet factories in Inner Mongolia, Ningxia and Gansu reduced or suspended the production in mid-December, which was 10-20 days in advance than in previous years, due to significantly falling orders amid aggravating impact from the COVID-19 pandemic after the control measures were relaxed as well as the gloomy real estate. In addition, most billet factories in north China shipped their cargoes to east or north China with higher conversion margins than that in Foshan. Collectively, the inventory in Foshan dropped palpably. The inventory in east China continued to accumulate slightly, and the circulation of cargoes among traders was also smooth considering moderate downstream demand. The aluminium billet market in December features weak supply and demand, and the social inventory is likely to rise significantly recently as some sources have been shipped directly to downstream players.
