Declining aluminium prices boost market procurement sentiment, premiums stabilise

The SHFE aluminium 04 contract opened higher and extended gains today, while market transactions were relatively sluggish. Futures later fell, and as buying sentiment strengthened and price acceptance improved, transaction prices in the spot market moved higher. Today’s mainstream quotations and transaction prices were mainly concentrated between a discount of RMB 10  per tonne and the average price. Today, the East China market shipments sentiment index was 3.07, down 0.26 w-o-w; the purchase sentiment index was 2.66, up 0.11 w-o-w.

Today, aluminium prices continued to edge lower from last Friday, and with inventory remaining high, traders in the central China market showed limited bullish sentiment. Overall purchase volumes recovered somewhat from the previous two trading days. As futures prices declined, market premiums showed a continued upward trend. Ultimately, actual transaction prices in the central China market were mainly concentrated between a discount of RMB 10  to the central China price and a premium of RMB 20  to the central China price, and moved higher throughout the session. Today, the central China market shipments sentiment index was 2.58, down 0.09 w-o-w; the purchase sentiment index was 2.36, up 0.01 w-o-w.

On the inventory side, aluminium ingot inventory in major consumption regions increased by 18,500 tonnes w-o-w today, with all three regions showing inventory buildup. In the short term, following the Chinese New Year, aluminium ingots continued to see seasonal inventory buildup. Affected by bullish sentiment, premiums are expected to remain on a narrowing trend.

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