SMM Aluminum Survey: Price Fluctuation Narrows, Buyers Wait for Chances

The SMM China Aluminum Ingot Trade Index slightly rebounded to 42.8%, up by 6.3% from previous week during August 15th to August 19th, but was still below the balance line of 50%. Domestic aluminum prices fluctuated in gradually narrowing ranges during the week. Though market trend was still unclear and bearish sentiment still prevailed, spot aluminum buyers made purchases nevertheless at times they deemed appropriate. Therefore, market sentiment slightly improved despite limited transactions.

In order to objectively and accurately show China’s spot aluminum ingot trading market, SMM has surveyed spot aluminum ingot traders from different regions, of different types and scales, based on their total traded volumes, downstream purchase volumes, traders inventories, cash flows and employee numbers etc.

This survey has covered 37 aluminum traders with a total monthly traded volume around 284 kt. These traders are located in Shanghai, Wuxi, Hangzhou, Nanhai, Tianjin and Shenyang.

The SMM China Aluminum Ingot Trade Index – Transaction Index rose by 12.2% to 36.5%, but was still relatively far behind the balance line. Though market transactions increased, the growth was limited due to low purchasing interest and strong wait-and-see sentiment among downstream buyers, which are results of seasonal low-demand, power restrictions, quality inspections and capital pressure etc.

The SMM China Aluminum Ingot Trade Index – Aluminum Price Expectation Index slightly rose by 8.1% from previous week to 59.5%. Market sentiment was slightly bearish with most market players neutral towards future aluminum prices, thereby partially paring previous losses. Market confidence was slightly improved with positive fundamentals compared with previous week.

The SMM China Aluminum Ingot Trade Index – Downstream Order Expectation Index slightly rose by 1.4% to the balance line of 50%. Downstream aluminum demand was sluggish and order volumes were relatively low during this survey period. However, after aluminum price narrowly struggled at RMB 17,800/mt, some downstream enterprises purchased at lower prices to build up their inventories. Therefore, order volumes are expected to slightly increase, but with very limited growth.