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31 MAY 2018 AL CIRCLE

China’s aluminium inventory marks fifth consecutive week of decline: A00 ingot price rises

EDITED BY : DEBANJALI SENGUPTA 2MINS READ

China’s primary aluminium inventory has been witnessing a continual decline on limited deliveries to warehouses since the beginning of the month, and today, May 31, 2018, did not display any exceptions. According to the Shanghai Metal Market, including SHFE warrants, the inventory saw a plunge from 2.05 million tonnes to 2.03 million tonnes. Deliveries to warehouses at major markets continued to be limited, SMM learned.

This drop in aluminium inventory indicates that it dipped 45,000 tonnes from Thursday, May 24, and fell 20,000 tonnes from Monday, May 28. The week-on-week decline today was relatively slower than the decline of 60,000 tonnes last Thursday, and marked a fifth consecutive week of decline.

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The table below shows the movements of inventories across the major Chinese cities.

The average A00 aluminium ingot price, on the other hand, according to SMM, saw a marginal surge on 31st of May, from RMB 14590 per tonne to RMB 14610 per tonne, due to a tight supply in the market. The prices are expected to range within RMB 14,590 per tonne to RMB 14,630 per tonne, with spot discounts to settle at RMB 70 to 30 per tonne.

But some of the major markets in China more or less witnessed a plunge in prices or remained unaltered. In east and north, the prices dropped from RMB 14585 to RMB 14560 per tonne and from RMB 14610 to RMB 14600 per tonne respectively, and in south, the price remained unchanged at RMB 14635 per tonne.

The significant drop in spot aluminium price in east China could be because of the lowered transactions in Shanghai at RMB 14570-14660 per tonne with discounts of RMB 60-50 per tonne against the SHFE 1806 contract, lesser than RMB 14640-14650 per tonne on the previous day. Transactions in Wuxi and Hangzhou also dipped on 30th of May and closed at RMB 14,570-14,600 per tonne and RMB 14,600-14,630 per tonne respectively.  Although sellers were keen to offload cargoes but were reluctant to lower their offers. Downstream consumers purchased only on demand. SMM observed that sellers and buyers were in a stalemate position on spot aluminium prices on May 30, 2018.


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EDITED BY : DEBANJALI SENGUPTA 2MINS READ

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