Inventory-wise, Wuxi, Foshan, Nanchang, and Huzhou all saw a faster pace of inventory buildup, with Foshan experiencing a sharp inventory surge due to concentrated arrivals of shipments from the north. On one hand, constrained by persistently high prices and seasonal downstream impacts, extrusion plants showed significantly insufficient buying sentiment, with demand continuing to weaken.
On the other hand, although the operating rate of billet plants declined slightly, the overall supply reduction was insufficient, leading to piled-up in-factory inventory and shipments starting to be sent to warehouses, with supply-side pressure continuing to increase. Against the backdrop of aluminium prices holding up well, the aluminium billet industry maintained a supply-demand imbalance, with total inventory still climbing. It is expected that the aluminium billet inventory may reach 250,000 tonnes by month-end.
As domestic and overseas macro sentiment remained strong, SHFE aluminium hit a record high during the week and stayed high without a significant correction trend. Against the backdrop of continued strong aluminium prices, aluminium billet processing fees extended declines initially during the week, then saw a slight recovery, remaining in a deep adjustment phase.
By region, Foshan was at -RMB 50 per tonne, up RMB 90 per tonne w-o-w; Wuxi was at -RMB 50 per tonne, up RMB 100 per tonne and down RMB 50 per tonne w-o-w respectively; Nanchang was at -RMB 150/100 per tonne, flat w-o-w. Due to the difference between current prices and the monthly average price last month, there were varying liquidation needs in the market, leading to chaotic processing fee quotes and significant price differences.
