The SHFE aluminium 2601 contract performed strongly in the morning session, with prices rising overall and the price centre significantly higher than the previous trading day. Trading sentiment in the East China market weakened overall, primarily affected by year-end enterprise settlement and account closing, leading to generally low market liquidity.
Coupled with the rise in SHFE aluminium prices, the mainstream transaction discount widened further. Today, the mainstream transaction prices were mainly in the range of a discount of RMB 20 per tonne to a discount of RMB 10 per tonne against the SMM average price. The East China market selling sentiment index was 2.13 today, down 0.09 w-o-w; the buying sentiment index was 2.20, down 0.19 w-o-w. The SMM A00 aluminium price was quoted at RMB 22,490 per tonne, up RMB 470 per tonne from the previous trading day, at a discount of 200 per tonne against the 2601 contract, down RMB 10 per tonne from the previous trading day.
Trading in the central China market continued to weaken today, as the impact of environmental protection-driven production restrictions intensified. Most downstream processing enterprises fully halted production and stopped raw material procurement, with aluminium ingot circulation occurring only among traders. Combined with high aluminium prices, overall procurement sentiment in the market was weak. The final actual transaction prices hovered between a discount of RMB 10 and a discount of RMB 40 against the central China price. The central China market selling sentiment index was 2.73 today, up 0.02 w-o-w; the buying sentiment index was 1.37, down 0.61 w-o-w. The SMM central China aluminium price closed at RMB 22,300 per tonne, up RMB 450 per tonne from the previous trading day, at a discount of RMB 390 per tonne against the 2601 contract, down RMB 30 per tonne from the previous trading day; the Henan-Shanghai price spread was -RMB 190 per tonne, down RMB 20 per tonne from the previous trading day.
On the inventory side, aluminium ingot inventories in major consumption areas increased by 24,000 tonne w-o-w on Friday. Regional performance diverged, with Wuxi and Gongyi experiencing significant inventory buildup, while Guangdong showed destocking. Overall, warehouse withdrawals were low, influenced by increased warehouse inflows in Wuxi and Gongyi, leading to inventory accumulation in these two locations. Affected by regional price spreads, warehouse inflows in Foshan decreased, resulting in lower local inventory. In the short term, high aluminium prices may continue to suppress end-use demand, aluminium ingots still face inventory buildup risks, and spot premiums per discounts are expected to remain under pressure.
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.
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