SMM also calculated and found that the stock level on May 20 was 90,000 tonnes higher year-on-year. The latest surge in inventories is linked with rising aluminium prices, which are discouraging domestic downstream manufacturers from purchasing new stock.
Analysis for upward trajectory
Other factors that contributed to the rise in inventory included an influx of primary aluminium from Guangxi and Yunnan. South China saw a month-on-month increase of over 1,000 tonnes in arrivals over the weekend. Inching closer to the domestic off-season was also a valid reason for the inventory surge over the weekend as demand started decreasing. Outflows from warehouses in south China decreased by 3,800 tonnes M-o-M, a significant decline of 50 per cent, while that in Wuxi dropped by 2,000 tonnes M-o-M.
Gongyi was an exception as it saw an uptick in downstream purchases, resulting in outflows increasing by 12,000 tonnes M-o-M and primary aluminium inventory declining by 2,000 tonnes.
