China’s aluminium ingot inventory accumulates additional 8,000 tonnes W-o-W due to mid-week restocking

According to the Shanghai Metals Market survey, China’s social inventory of aluminium ingots increased by 8,000 tonnes week-on-week and 10,000 tonnes from July 15, reaching 797,000 tonnes on July 18, of which the amount for sale stood at 671,000.

Following the restocking mid-week, the current aluminium ingot inventory has reached a new high for H2, up 243,000 tonnes year-on-year. The incessant increase in inventory since early July, due to a production surge in May and June and weak demand due to the ongoing traditional off-season, has been exerting pressure on domestic prices, bringing them below the RMB 20,000 per tonne level.

SMM expects the decline in domestic aluminium ingot inventory in July will be limited, likely fluctuating between 750,000 tonnes and 850,000 tonnes.

On the other hand, social inventories of aluminium billet showcased a contrasting scenario, shedding off 6,000 tonnes W-o-W. As a result of a rebound in aluminium billet pick-up from warehouses by about 4,200 tonnes W-o-W to 42,400 tonnes, aluminium billet inventory decreased to 140,700 tonnes as of July 18.

With the reduction in supply to warehouses, inventory in East China declined. Conversely, inventory in South China grew as a slight accumulation of stocks occurred.

However, despite the mid-week drop, aluminium billet warehouses remained at a high level for the same period in nearly three years, exceeding last year’s level by 51,000 tonnes. SMM expects the overall aluminium billet inventory to remain between 130,000 and 180,000 tonnes.

Sourced from SMM under the content exchange agreement