SMM

SHANGHAI, May 8 (SMM) –  In terms of fundamentals, the domestic aluminium supply was largely stable last week. The domestic operating aluminium capacity added 400,000 mt MoM to around 40.65 million mt in April, SMM’s preliminary statistics showed. The growth was mainly contributed by Guizhou, Guangxi, and Sichuan, where there are still 700,000 mt of idled capacity waiting to be put into operation in the future. In terms of cost, the average price of SMM prebaked anodes plunged 868 yuan/mt month-on-month in early May, and the power cost of smelters with captive power plants also declined. Thus, the cost of aluminium industry dropped significantly, allowing smelters’ profitability to improve. On the demand side, downstream operating rates mostly declined last week due to the holiday break. In view of market pessimism and insufficient new orders, the operating rates may continue to fall in May. Aluminium ingot social inventory kept falling, while aluminium billet social inventory accumulated slightly due to concentrated arrivals during the holiday.