According to SMM statistics, as of March 26, aluminium billet inventory in China’s major consumption hubs totalled 341,500 tonnes, down 28,000 tonnes from last Thursday, with the destocking trend steadily accelerating. On warehouse withdrawals, aluminium billet warehouse withdrawals totalled 69,800 tonnes in the single week from March 17 to March 23, up 8,200 tonnes from the previous week. Combined with the inventory decline trend, this week’s aluminium billet warehouse withdrawals were expected to exceed 70,000 tonnes, indicating consumption had returned to the pace of the peak season. Aluminium billet inventory accelerated destocking this week, mainly due to the sharp and rapid drop in aluminium prices, coupled with limited earlier stockpiling by extrusion plants amid fear of high prices. Against the backdrop of restocking and recovering rigid demand, aluminium billet social inventory posted nearly 30,000 tonnes of destocking in a single week. The inventory downtrend has entered a phase of rapid destocking. Based on recent consumption conditions and seasonal patterns, aluminium billet inventory was expected to return to the 250,000-280,000 tonnes range by the end of April.

During the week, uncertainty surrounding geopolitical conflicts continued, and market speculative sentiment faded. Aluminium prices showed a sideways recovery trend, but due to the sharp drop in aluminium prices, and considering the impact of absolute transaction prices, aluminium billet processing fees remained strong. By region, processing fees in Foshan were quoted at 290/340, up RMB 260 per tonne WoW; Wuxi was quoted at RMB 350/400 per tonne, up RMB 250 per tonne WoW; and Nanchang was quoted at RMB 470/520 per tonne, up RMB 320 per tonne WoW. By region, in Nanchang, declining current inventory led suppliers to hold prices firm; in Wuxi, top-tier enterprises suspended quotations, with circulation mainly driven by traders, but ample earlier stockpiling by traders limited the upside in processing fees; in Foshan, sales volume remained the priority, and suppliers took the opportunity to recover funds. During the week, aluminium billet processing fees in all regions rebounded above 300, mainly due to the sharp drop in aluminium prices. The price spread versus the monthly average aluminium price hovered around RMB 800 per tonne, resulting in a notable repair in processing fees. Current aluminium billet inventory remained at a high level, and supply-side pressure had not fully eased, but current aluminium billet processing fees were closely tied to the cost relationship with weekly and monthly average aluminium prices.

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.