[Stagflation Expectations Heat Up Combined with China Inventory Buildup, Divergence Between SHFE and LME Aluminum Continues] Overall, geopolitical risks outside China persisted and supply tightened, keeping LME aluminum prices on a relatively strong footing; high inventory levels in China combined with weak demand limited SHFE upside room, with a clear divergence between SHFE and LME price trends.

As of April 24, the mainstream price in the south China market — SMM A00 aluminum (Foshan) was at a discount of 345 yuan/mt against the 2605 contract, while the mainstream price in the east China market — SMM A00 aluminum was at a discount of 130 yuan/mt against the 2605 contract. The price spread between the two regions had exceeded 200 yuan/mt, covering sea freight, short-haul transfer, and logistics costs, officially opening up the transshipment window between Guangdong and Shanghai...

According to SMM data, as of April 24, social inventory of aluminum ingots in China's major consumption regions stood at 1.465 million mt, up 42,000 mt WoW, maintaining an inventory buildup trend for multiple consecutive weeks, with the pace of buildup widening again WoW. Weekly warehouse withdrawals rebounded slightly by 14,200 mt WoW to 115,200 mt, but the improvement in withdrawals fell short of the recent increase in arrivals, indicating clearly insufficient momentum for inventory drawdown..

Entering the second half of March, regional divergence in China’s aluminum market became increasingly pronounced, with the divergence between inventory trends and spot price spreads in east China and south China intensifying. On the one hand, the nationwide post-holiday inventory buildup in aluminum gradually approached its end, inventory overhang pressure in east China continued to ease, circulation efficiency steadily improved, the inventory buildup momentum slowed down significantly, and.....

Before and after the Chinese New Year, the domestic spot aluminum market exhibited significant regional differentiation, with the spot price spread between South China (Foshan) and East China (Wuxi) drawing particular attention. Before the holiday, the Guangdong-Shanghai price spread reached a high of 150 yuan/mt on February 10, while by February 27 after the holiday, this spread had narrowed significantly to 10 yuan/mt.....

In terms of aluminum billet inventory, according to SMM statistics, the domestic aluminum billet inventory in major consumption areas stood at 127,500 mt on June 12, a decrease of 2,000 mt from Monday and a decline of 2,500 mt WoW, still hovering around 130,000 mt. In the past week, the regional distribution of aluminum billet inventory has shown divergence. In the Wuxi area, there was still an increase in warehouse arrivals, but poor market transactions exacerbated the local inventory buildup. In the Nanchang area, due to the persistently high Shanghai-Guangdong price spread, more billets were transported from the billet plants around South China to the Nanchang area, leading to an increase in local inventory, while arrivals in the Guangdong area were relatively low. In terms of outflows from warehouses, the total outflows from public warehouses of aluminum billets in China during the period from June 3 to June 8 amounted to 36,400 mt, a decrease of 1,200 mt from the previous period.