Approaching the end of March, domestic aluminium ingot inventory plummeted by 25,000 tonnes mid-week, nearing the 800,000 tonnes mark. According to SMM statistics, on March 27, the inventory of aluminium ingots in major domestic consumption areas was 802,000 tonnes, with 676,000 tonnes being tradable inventory, a decrease of 25,000 tonnes from Monday and 32,000 tonnes W-o-W from last Thursday. This phenomenon was mainly attributed to the steady increase in outflows from warehouses, with outflows from major consumption areas reaching 128,400 tonnes over the past week, up 1,300 tonnes W-o-W, and weekly outflows maintaining around 130,000 tonnes since March.
SMM learned that due to increased demand from the automotive and PV sectors in east China, restocking demand rose significantly this week, leading to a sharp decrease of 13,000 tonnes in Wuxi's inventory mid-week. Although procurement in Gongyi remained primarily driven by rigid demand, supply and demand conditions improved this week, with inventory decreasing by 7,000 tonnes mid-week. The rapid consumption of inventory was closely related to the reduction in in-transit and arrival volumes: arrivals in Wuxi decreased by over 10,000 tonnes this week, while Foshan and Gongyi remained relatively stable. Additionally, approaching holidays such as Qingming Festival, reduced transportation capacity led to a short-term increase in transportation costs, especially with a decline in trucking volumes in Yunnan and Guangxi, which facilitated the consumption of warehouse stocks. SMM expects that domestic aluminium ingot inventory will continue its destocking trend in the first half of April, potentially pulling back to around 750,000 tonnes by mid-April.
In the spot aluminium market, purchasing as needed remained the main trend this week, with some leading enterprises stockpiling mid-week. The discount in east China narrowed, primarily due to continued destocking and reduced arrivals in Wuxi, coupled with strong demand for aluminium from downstream PV and NEV sectors. As of Thursday, the discount of SMM A00 spot prices against the April contract was RMB 10 per tonne, narrowing by RMB 30 per tonne W-o-W from last Thursday. Trading in central China was moderate, with aluminium prices rising today and market sentiment cautious. As of Thursday, the discount of SMM Central China A00 against the April contract was RMB 110 per tonne, narrowing by RMB 40 per tonne W-o-W from last Thursday. In south China, the discount narrowed early in the week due to monthly long-term contract delivery needs, but demand weakened later, and suppliers' desire to recoup funds by month-end led to relatively ample market circulation. The overall market performance was stable this week, with the discount narrowing by RMB 10 per tonne to RMB 35 per tonne W-o-W from last Thursday. In the short term, despite the seasonal peak, aluminium demand increased, and upward momentum for aluminium prices remained. However, downstream acceptance of high prices was moderate, and spot premium increases were slow. The model predicts that the average price range for SMM A00 aluminium premiums and discounts will be RMB -30 to -5 per tonne, with a central value of RMB -15 per tonne, an extreme price range of RMB -70 to -40 per tonne, a normal price range of RMB -35 to 0 per tonne, and a conservative price range of RMB -25 to -10 per tonne.
In terms of aluminium billet inventory, the latest SMM data shows that as of March 27, 2025, the domestic social inventory of aluminium billets was RMB 272,000 per tonne, down 16,000 tonne W-o-W from last Thursday and 12,500 tonnes WoW from Monday. Regarding outflows from warehouses, with the deepening of the "Golden March and Silver April" peak consumption season, extrusion orders performed commendably. Coupled with the aluminium price center pulling back within a range, last week's aluminium billet outflows from warehouses reached 62,200 tonnes, hitting a new high for the year and successfully driving down aluminium billet inventory. This week, aluminium prices continued to adjust. With downstream consumption fully released at current aluminium prices, aluminium billet destocking remained stable. SMM believes that the logic of marginal strengthening in terminal restocking momentum has not changed. It is expected that domestic aluminium billet inventory will continue to decline steadily in the first half of April, with April inventory likely to pull back to the range of 200,000-250,000 tonnes.
The supply and demand fundamentals improved during the week, with SHFE aluminium maintaining range-bound adjustments and downstream buying sentiment performing well. Aluminium billet inventory continued its destocking trend, and the current market supply remained relatively ample. Suppliers intended to raise processing fees, while the demand side maintained a rhythm of bargain down purchasing prices. During the week, there was an expectation of tightening supply in the Foshan aluminium billet market, with good transaction conditions. The aluminium billet market quoted 160/210, up 30 from last Thursday. In the Wuxi market, specific models of aluminium billets experienced shortages, with processing fees quoted at 150/200, down 30 from last Thursday. The Nanchang market atmosphere was average, with processing fees quoted at 150/200, up 30 from last Thursday. (Unit: RMB per tonne)
On the demand side for aluminium billets, the operating rate in the aluminium extrusion industry rose slightly by 1 percentage point W-o-W to 61 per cent, with sub-sectors continuing to diverge. In industrial extrusions, top-tier automotive extrusion enterprises maintained an operating rate of over 80 per cent with orders from the NEV industry chain. However, according to SMM surveys, some small and medium-sized building material enterprises that had previously ventured into industrial extrusions reported that automotive extrusions, due to complex process certifications and significant equipment investments, were increasingly concentrated in top-tier enterprises. The survey revealed that some small and medium-sized enterprises, suffering from severe product homogenization, had idle industrial production lines this week. In PV extrusions, despite continued pressure on processing fees, mainstream PV extrusion enterprises remained at full production due to the concentrated delivery period of component factories from March to April. In construction extrusions, some enterprises reported that the launch of local government special bond projects (such as high-speed rail transit and industrial parks) brought a recovery in public construction orders. This week, the operating rate of construction extrusions slightly increased, but demand for civilian building materials remained suppressed by the slowdown in real estate completions, with the operating rates of window, door, and aluminium formwork extrusion enterprises still relatively low. SMM will continue to track the destocking rhythm during the traditional peak season, focusing on the transmission efficiency of NEV and PV installation demand and the actual boost effect of local government special bonds on infrastructure projects.
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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