Under the backdrop of declining aluminium prices, purchasing sentiment remains at a relatively low level

SHFE aluminium 2602 fluctuated downward in the morning session, with the price centre lower than the previous trading day. The decline in aluminium prices led to a slight increase in purchasing sentiment. However, constrained by the approaching Chinese New Year break, overall downstream procurement sentiment remained low.

Mainstream transaction prices were concentrated at a discount of RMB 20 per tonne to parity. Today, the sales sentiment index in the east China market was 2.63, up 0.1 w-o-w; the purchasing sentiment index was 2.18, up 0.05 w-o-w. SMM A00 aluminium closed at RMB 23,700 per tonne, down RMB 960 per tonne from the previous trading day, at a discount of RMB 220 per tonne against the 2602 contract, down RMB 10 per tonne from the previous trading day.

Aluminium prices continued to decline, and with the end of environmental protection-related controls in central China, downstream processing enterprises took the opportunity to restock slightly. However, high aluminium prices, coupled with bearish expectations, kept overall purchasing sentiment weak. Suppliers exhibited strong wait-and-see sentiment, with a clear intention to hold prices firm andwere reluctant to sell, leading to cautious circulation of spot cargo in the market. Final actual transaction prices in the central China market ranged from a discount of RMB 10  to a premium of RMB 10  against the central China price.

Today, the sales sentiment index in the central China market was 2.75, down 0.15 w-o-w; the purchasing sentiment index was 2.25, up 0.2 w-o-w. SMM central China closed at RMB 23,530 per tonne, down RMB 950 per tonne from the previous trading day, at a discount of 390 per tonne against the 2602 contract, flat from the previous trading day. The Henan-Shanghai price spread was -RMB 170 per tonne, narrowing by RMB 10 per tonne from the previous trading day.

On the inventory side, aluminium ingot inventory in major consumption areas increased by 29,500 tonnes w-o-w, with inventory buildup observed in all three regions. In the short term, high aluminium prices may continue to suppress end-use demand. Combined with the impact of the downstream Chinese New Year break, 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.