Sweeping decline in primary aluminium inventories by 44,000 tonnes boosts up A00 aluminium ingot price marginally

According to Shanghai Metals Market, the inventories of primary aluminium have increased the pace of decline this week and recorded a drop of 44,000 tonnes across eight major Chinese consumption areas, including SHFE warrants, to stand at 755,000 tonnes, as of November 28. On last Thursday, on November 21, the inventories had decreased by 35,000 tonnes week-on-week to stand at 799,000 tonnes, while on Monday, November 25, the inventories were at 781,000 tonnes after declining by 18,000 tonnes from Thursday.

Weaker arrival of stocks due to production cut at many smelters during the winter heating season could be a reason for the decline in inventories.

Given below is the chart that indicates the current status of primary aluminium inventories across China in more details:

As the above chart indicates, Nanhai among all the major cities has seen the highest fall in inventories over the week today by about 28,000 tonnes to stand at 215,000 tonnes, followed by Wuxi and Hangzhou, where the inventories have dwindled by 7,000 tonnes and 5,000 tonnes to 233,000 tonnes and 49,000 tonnes, respectively. In the cities like Chongqing and Linyi, the inventories have remained restrained week-on-week.

The sweeping decline in primary aluminium inventories, on the other hand, has marginally lifted the price of A00 aluminium ingot after it dropped consecutively in the last two days, found SMM. So, the price today has inched up from RMB 13,950 per tonne on November 27 to RMB 13,960 per tonne on November 28. The average prices are expected to range between RMB 13,940 per tonne and RMB 13,980 per tonne, with the spot contract to be traded at a premium price of RMB 60-100 per tonne.

The average alumina spot price, however, has declined by RMB 1 per tonne to stand at RMB 2,483 per tonne, after remained restrained in the last two days.