A00 ingot gets support from higher input prices; inventory shrinks on slower deliveries

According to an update from Shanghai Metals Market, SHFE 1810 contract fell and closed at RMB 14,685 per tonne today as some longs covered their positions and the contract is expected to face resistance at RMB 14,850 per tonne.  Average A00 ingot prices stand at RMB 14,500 per tonne today, up about 0.07 % from Friday. Prices in the individual spot markets also started the week with a rise. Spot discounts have narrowed and are now ranging at RMB 50-10 per tonne.

China's inventory of primary aluminium across eight major consumer markets, including SHFE warrants, lost 9,000 tonne from Thursday August 9 to stand at 1.766 million tonne as on Monday August 13, SMM data showed. Though downstream consumption was low, the inventory fell over the weekend as deliveries from the northwest smelters were delayed. Inventories continued their downward trend over a few weeks.

The current inventory status in the major Chinese cities stands as follows: 

Average spot alumina price stands at RMB 3037 per tonne (US$ 442 per tonne) while Chalco alumina stands at RMB 3200 per tonne (US$ 466 per tonne).  Australian alumina FOB price stands at US$ 532 per tonne. Higher input prices are expected to support the aluminium prices in China in the short and medium term, despite lacklustre downstream demands on account of low end user demand.