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SMM

Strong bullish market sentiment, sellers are reluctant to sell and holding prices firm

2MINS READ

Image of aluminium ingot

In the morning session, SHFE  aluminium 2602 fluctuated upward, with the price centre rising from the previous trading day. Affected by the US-Iran conflict, market bullish sentiment was strong. In addition, as the current price spread between futures contracts performed well, some sellers held prices firm and were reluctant to sell, and their willingness to sell declined today. Some downstream operations began stockpiling, with acceptance of aluminium prices edging higher. Today’s market quotes were mainly from the average price to a premium of RMB 20 per tonne, and mainstream transactions were from the average price to RMB 10 per tonne. Today, the East China market willingness-to-sell sentiment index was 2.68, down 0.27 m-o-m; the buying sentiment index was 3.19, down 0.03 m-o-m.

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Geopolitics led to shutdowns of aluminium production lines in Qatar. In the central China market, traders’ bullish sentiment was strong. Although downstream processing enterprises were constrained by weaker-than-expected orders and inventories not yet fully depleted, resulting in relatively weak purchasing sentiment, overall market transactions still improved compared with the previous two days.

Holders showed a more notable willingness to sell on price strength, while holding prices firm and being reluctant to sell. Ultimately, actual transaction prices in the central China market hovered around parity with the central China price to a discount of RMB 20. Today, the central China market willingness-to-sell sentiment index was 2.69, up 0.03 m-o-m; the buying sentiment index was 2.32, up 0.05 m-o-m.

On the inventory side,  aluminium ingot inventory in major consumption areas increased by 5,500 tonnes m-o-m today. Affected by seasonality, all three regions saw inventory buildup. In the short term, after the Chinese New Year,  aluminium ingots continued to see seasonal inventory buildup; influenced by market bullish sentiment, premiums are expected to remain on a narrowing trend.

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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