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23 AUGUST 2018 AL CIRCLE

Primary aluminium inventories extend W-o-W drop in China on limited supplies and active downstream purchases

EDITED BY : DEBANJALI SENGUPTA 2MINS READ

Limited arrivals to the warehouses and active downstream purchases still continue in China, resulting in a week-on-week decline in primary aluminium inventories across eight major consumption areas. Stocks, including the SHFE warrants, shrank 23,000 tonnes from last Thursday, August 16, to stand at 1.74 million tonnes as of today, August 23, Shanghai Metals Market found. This marks a faster week-on-week drop compared to 14,000 tonnes last Thursday. 

Stringent availability of railroad cars in Xinjiang province could be responsible for the narrow delivery of aluminium ingots from the area. Alongside, active participation from downstream consumers for purchasing primary aluminium, on the event of reduced aluminium prices at the beginning of the week, also contributed to the plunge in inventories.

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The below chart shows the current status of the inventories in major Chinese markets:

Today, A00 aluminium ingot spot price fell again after a rise in the past two consecutive days. According to the SMM data, the price currently hovers at RMB 14560 per tonne, in contrast to RMB 14590 on August 22. This indicates that the price today declined by RMB 30 per tonne. The  average prices in the spot market are expected to rally between RMB 14540 per tonne and RMB 14580 per tonne, with spot discounts to settle at RMB 70 to RMB 30 per tonne.

In the east, the ingot spot price plunged RMB 40 per tonne to stand at RMB 14540 per tonne while in the south and north; the prices dropped RMB 25 per tonne and RMB 5 per tonne to clock at RMB 14695 per tonne and RMB 14545 per tonne, respectively.


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EDITED BY : DEBANJALI SENGUPTA 2MINS READ

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