On January 27 morning, the SHFE aluminium front-month contract centre fluctuated rangebound, declining to around RMB 20,170 per tonne, as reported by SMM. The East China market was almost entirely immersed in the holiday atmosphere, with sluggish market trading and a frozen trading sentiment, making transactions difficult. The SMM A00 spot price was on par with the SHFE aluminium 2502 contract at a discount of RMB 20 per tonne, unchanged from the previous trading day. SMM A00 aluminium ingot prices recorded RMB 20,120 per tonne, down RMB 70 per tonne from the previous trading day.
In the central China market, although environmental protection measures in Gongyi were fully lifted over the weekend and large downstream processing plants resumed full casting and rolling operations, the upcoming Chinese New Year led to a significant decline in pre-holiday stocking demand on the last trading day before the holiday. Market trading turned sluggish. Today, the Henan-Shanghai price spread recorded a discount of RMB 100 per tonne, widening by RMB 10 per tonne from the previous trading day. The SMM central China A00 price against the SHFE aluminium 2501 contract recorded RMB 20,020 per tonne, down RMB 80 per tonne from the previous trading day, with actual market transactions at around SMM central China -10 to on par with yuan/mt.
Inventory-wise, SMM's mainstream aluminium consumption regions recorded a weekly inventory of 492,000 tonnes, with an inventory buildup of 32,000 tonnes. The turning point for social inventory buildup has arrived, but the total inventory remains at a relatively low level. Attention should be paid to inventory changes during the Chinese New Year, which may fall short of market expectations, limiting the room for seasonal spot market discounts to widen.
According to SMM statistics, as of January 27, the social inventory of aluminium ingots in major domestic consumption areas stood at 492,000 tonnes, a W-o-W increase of 32,000 tonnes; the aluminium billet inventory in major domestic consumption areas reached 222,800 tonnes, a W-o-W increase of 22,800 tonnes.
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