SMM

As of December 21, 2023, China's aluminum ingot inventory was 446,000 mt, down 24,000 mt from Monday and 37,000 mt WoW, setting a new yearly low and down 29,000 mt YoY. Last week, aluminum pick-up from warehouses totaled 129,100 mt, down 22,300 mt WoW. Despite a seasonal dip in consumption, domestic aluminum inventories have steadily dropped since mid-November, hitting record lows not seen since January 2017, with over 250,000 mt depleted in five weeks. Mid-week, with low inflows and no stock build-up in Gongyi, domestic aluminum inventories fell below 450,000 mt, continuing the destocking trend with no sign of slowing. SMM notes destocking since late November has outpaced expectations. December saw limited cast aluminum ingot production, and imports haven't impeded destocking. Inventories keep hitting new yearly lows, with low transit volumes to Wuxi and South China, and no major arrivals in Gongyi despite increased transit. SMM predicts year-end domestic aluminum ingot stocks will keep depleting due to Yunnan's production cuts. After fast early December destocking, inventories might drop to 400,000-450,000 mt by late December.