On Mar 7, 2024, SMM data showed that the social inventory of aluminium ingots in China’s eight major markets was 821,000 mt, (the amount for sale stood at 695,000 mt), up 5,000 mt from Mar 4, up 32,000 mt WoW, and 330,000 mt higher than pre-CNY holiday level. The inventory growth slowed down and remained at the lowest compared to the same period of past seven years. In terms of inventory changes in the third week after CNY in the past six years, inventory growth of 32,000 mt or 4.1% remained significant. The outflows from warehouses in the second week after CNY was 98,800 mt, up 17,700 mt WoW.
It may take 5-6 weeks for post-CNY inventory to show signs of a downward trend, but the inventory build-up will slow down significantly 3-4 weeks after CNY. The inventory performance after CNY this year is similar to last year. SMM believes that the digestion of stocks is expected to accelerate amid traditional peak season in March, dragging down domestic inventory growth. As outflows from warehouses rise, SMM predicts that the inventories may build up only modestly and move between 800,000-900,000 mt in the first half of March, and the peak of inventory may be around 850,000-900,000 mt, which was basically in line with previous expectations.
