In the early session, aluminum prices fluctuated rangebound around 20,450 yuan/mt, and rebounded to around 20,550 yuan/mt in the second session. In the spot market, some downstream enterprises in east China started pre-holiday restocking, but the market was still impacted by low-priced cargoes and hedging warrants, with transactions mainly at parity to discounts against SMM A00. SMM A00 was at a premium of 10 yuan/mt against the SHFE aluminum 2504 contract, up 10 yuan/mt from the previous trading day. SMM A00 aluminum ingot prices were recorded at 20,560 yuan/mt, unchanged from the previous trading day.
In the central China market, after a sharp decline in aluminum prices, downstream restocking increased, and SHFE aluminum shifted to a backwardation structure. With the spot-futures price spread widening, suppliers were more active in selling, and market offers dropped from a premium of 20 yuan/mt against central China to near parity. Overall, trading in the central China market improved slightly, but attention should be paid to downstream restocking on the last trading day before the holiday. SMM central China A00 was recorded at 20,490 yuan/mt against the SHFE aluminum 2504 contract, unchanged from the previous trading day. The Henan-Shanghai price spread was -70 yuan/mt, with actual transactions at parity to a premium of 10 yuan/mt against SMM central China prices, and -60 yuan/mt against the 2504 contract.
In terms of inventory, SMM daily aluminum social inventory was recorded at 654,200 mt, down 0.82 mt. After the center of aluminum prices moved lower, downstream restocking will increase. Once finished product inventories of downstream processing materials are digested to normal levels, inventory across the country will accelerate destocking, and market premiums and discounts will stabilize and rebound.
