Aluminium billet inventory consolidates at highs; production cuts and aluminium price pullback lead to regional divergence in processing fees

According to SMM statistics, on September 30, aluminium billet inventory in major consuming regions in China stood at 149,500 tonnes, up 500 tonnes WoW from last Thursday and down 5,000 tonnes from this Monday, with inventory consolidating at highs and basically flat overall. On a year-over-year basis, inventory was about 35,000 tonnes higher than the same period in 2025 and about 41,000 tonnes higher than the same period in 2024, with total inventory still at the highest level for the same period in the past four years. From the perspective of warehouse withdrawals, aluminium billet withdrawals from September 21 to September 28 totalled 44,800 tonnes, holding near 45,000 tonnes for two consecutive weeks. By region, Foshan inventory stood at 69,500 tonnes, down 3,000 tonnes from last Thursday; Nanchang at 6,000 tonnes, down 3,500 tonnes; Wuxi at 26,500 tonnes, up 5,000 tonnes; Huzhou at 29,000 tonnes, up 2,000 tonnes; and Changzhou at 18,500 tonnes, basically flat. This round of inventory consolidation at highs was driven by both supply and demand: Demand side, pre-holiday stockpiling entered its final stage, with warehouse withdrawals holding at high levels but slowing marginally; supply side, maintenance-related production cuts continued at aluminium billet producers in Guangxi and Xinjiang, but arrivals in Wuxi and Huzhou increased periodically, pushing up inbound pressure and leading to notable divergence in regional inventory trends.

During the week, aluminium prices drifted lower, with SMM A00 spot aluminium prices pulling back from RMB 24,240 per tonne last Thursday to RMB 24,030 per tonne on September 30, a cumulative decline of about RMB 210 per tonne. Against the backdrop of falling aluminium prices, processing fee trends diverged notably across regions. By region, in Foshan, φ90 aluminium billet processing fees were quoted at RMB 100 per tonne and φ120 at RMB 50 per tonne, each down RMB 30 per tonne from last Thursday; in Wuxi, φ90 aluminium billet was quoted at RMB 410 per tonne and φ120 at RMB 280 per tonne, up RMB 80 per tonne and RMB 70 per tonne respectively from last Thursday; in Nanchang, φ90 aluminium billet was quoted at RMB 330 per tonne and φ120 at RMB 250 per tonne, up RMB 130 per tonne and RMB 150 per tonne respectively from last Thursday. The divergence in processing fees during the week was mainly driven by regional differences in arrivals: Foshan faced relatively high supply pressure, and with high aluminium premiums, processing fees remained under pressure, with producers continuing to offer concessions to facilitate transactions; Wuxi saw increased arrivals, but with downstream pre-holiday restocking demand, supply-side pressure remained manageable, and there were expectations for processing fees to hold firm. Post-holiday processing fee trends are expected to depend on aluminium price movements and the pace of post-holiday arrivals, with supply-side pressure likely to be relatively significant after the holiday.

Note: This article has been shared by SMM and has been published by AL Circle with its original information without any modifications or edits to the core subject/data.