For aluminium ingots in South China, the average SMM A00 aluminium (Foshan) price on December 17 was RMB 21,640 per tonne, up RMB 120 per tonne on the day, at a discount of RMB 215 per tonne against the front-month contract, widening by RMB 5 per tonne from the previous day.
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A sharp decline in social inventory today supported suppliers to hold prices firm. However, driven by the core year-end need for destocking and cash flow, market willingness to sell remained strong, keeping circulation loose. Morning offers were mainly concentrated at RMB 10 to 0 per tonne. Downstream rush to buy amid continuous price rise provided a floor, but the incomplete implementation of new long-term contracts dampened traders' purchase willingness, leading to weak initial transactions. Later, continued futures gains pushed offers to around RMB 100 per tonne, prompting some buyers to replenish low-priced cargo, marginally improving transactions.
For aluminium billets in South China, on December 17, the processing fees for various specifications of SMM 6063 aluminium billets (Guangdong) were stable to lower. The average fee for Φ90/100 was RMB 450 per tonne, while for Φ120 and above it was RMB 400 per tonne, flat from the previous day, with price differences persisting in market quotes.
A significant rise in the base price failed to spur a downstream rush to buy amid continuous price rise. Enterprises prioritised securing low-priced cargo, resulting in limited overall demand. Subsequent offers were gradually lowered, leading to mixed transaction performance throughout the day, with processing fees lacking upward momentum.
On the inventory side, on Wednesday, aluminium ingot and billet inventories in major consumption areas decreased by 10,500 tonnes and 2,000 tonnes W-o-W, respectively, with South China seeing destocking of 2,000tonnes and 1,000 tonnes.
In the short term, the pullback in absolute prices supports sellers' willingness to hold prices firm, but weakening demand reduces downstream purchase willingness, and spot discounts are expected to fluctuate.
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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