According to SMM statistics, on April 23, aluminum billet inventory in China's major consumption areas totaled 278,000 mt, down 14,000 mt WoW from last Thursday, smoothly falling below 280,000 mt, largely in line with expectations at the beginning of the month. In terms of warehouse withdrawals, aluminum billet warehouse withdrawals totaled 49,000 mt last week, down 5,000 mt WoW, mainly because aluminum prices once again rose above 25,000, and downstream buyers again adopted a wait-and-see attitude.

[Strait Blockade Remains in Stalemate, LME Outperforms SHFE for Aluminum] Overall, the strait blockade continued. The supply gap outside China and the ongoing drawdown of LME inventory supported LME prices to hold up well, while China's aluminum ingot inventory remained at elevated levels. Attention should be paid to whether a turning point in domestic inventory can materialize smoothly.

[Geopolitical Negotiations Remain Unresolved; Aluminum Prices Continue LME Outperforms SHFE Pattern] Overall, the Middle East negotiation process continued to face setbacks. However, the supply gap outside China and the continued drawdown of LME inventory supported LME prices to hold up well. Meanwhile, China's aluminum ingot inventory remained at elevated levels, and attention should be paid to whether the inflection point of domestic inventory can materialize smoothly.

During the week, downstream procurement sentiment remained cautious, dominated by rigid demand, making it difficult for market trading volumes to increase. Meanwhile, due to the persistent surplus of aluminum billets, processing fees were under severe pressure, prompting producers to actively reduce billet casting volumes. Combined with social inventory prioritizing warehouse inflows of aluminum ingots, aluminum billet warehouse inflows decreased significantly, and social inventory maintained a steady downward trend. With the tightening of the supply side and the reduction in inventory arrivals, aluminum billet inventory will continue to maintain its destocking pace, and by month-end of April, aluminum billet inventory is expected to pull back to 250,000 mt.

[SMM Aluminum Price Weekly Review: Supply Shortages Outside China Supported Prices to Hold Up Well, China Focused on the Turning Point of Aluminum Ingot Social Inventory]

As the center of aluminum prices shifted upward again, compounded by uncertainty in macro sentiment, downstream participants adopted a cautious wait-and-see approach and slowed down their procurement pace, leading to a sharp decline in aluminum billet warehouse withdrawals within the week and a slowdown in the pace of inventory destocking. Currently, consumption pace maintained a seasonal recovery, and the progress of production resumptions on the aluminum billet supply side remained slow. Aluminum billet inventory was expected to maintain its destocking pace, with aluminum billet inventory likely to fall below 300,000 mt next week.