Future aluminium price hike in China results in weak spot transactions

Shanghai Metals Market found a sharp plunge in purchasing enthusiasm of spot aluminium among downstream consumers in China as on Monday, November 19. As per the SMM analysis, it could be because of the rise in primary aluminium future prices and the support that downstream production got from the existing primary aluminium stocks at the beginning of the week.

The SHFE 1812 contract climbed in morning trades. In Shanghai, most spot transactions were seen at RMB 13,750 per tonne to RMB 13,760 per tonne, with discounts of RMB 30 per tonne to RMB 20 per tonne against the December contract. Transactions in Wuxi were also found the same as that in Shanghai, but Hangzhou recorded a transaction at RMB 13,750 per tonne to RMB 13,770 per tonne.

The primary aluminium price gains, however, accelerated the confidence among downstream buyers across southern markets. But despite the keenness showed by traders and downstream consumers to purchase spot aluminium, the overall transactions in Gunadong remained brisk. Most of the transactions there were heard at RMB 13,830 per tonne to RMB 13, 840 per tonne with Guangdong-Shanghai spread at RMB 80 per tonne.

Billet processing fees, in contrast, held stable in the Guandong market, at RMB 460 per tonne to RMB 500 per tonne for 90mm and RMB 440 per tonne to RMB 480 per tonne for 110/120 mm and 150/178 mm.