Aluminium inventory dips for five consecutive weeks on fewer deliveries; ingot prices on a higher range

As reported by Shanghai Metals Market, China's primary aluminium inventory, including SHFE warrants, shrank 55,000 tonne from last Thursday to stand at 1.98 million tonne as of Thursday June 7. The commissioning of new production capacity slowed down and fewer deliveries arrived at warehouses in south China bringing down the inventory.

The drop marked a fifth consecutive week of decline. The current inventory status in the major Chinese cities is as follows:  

Average A00 Aluminum Ingot price stands at RMB 14800 per tonne today after two consecutive rises with the spot discount ranging from RMB 60 to 20 per tonne.

According to SMM research, China's May aluminium output declined 3.2% YoY and stood at 3.07 million tonne. Output in the first five months of this year dropped 2.7% compared to the same period of 2017 and stands at 14.79 million tonne. 

The annualised operating capacity grew by 280,000 tonne to 36.18 million tonne in May from April. Growth was higher as capacity resumed in Henan province and as newly-built capacity commenced production in Guangxi and Inner Mongolia.

Operating capacity is expected to rise further in June as new capacity will be commissioned across aluminium plants such as Hualei, Huarun, Huaren, and Baise. Aluminium output is likely to fall 3.1% in June YoY to stand at 3 million tonnes.