Pick up and supply
The year-on-year increase in aluminium billet inventories could be attributed to reduced pick-up from warehouses by 6,700 tonnes to 45,200 tonnes, dropping to the lowest level in nearly four years.
Due to weak purchase sentiment across China, there is a very little room for improvement in aluminium billet pick-up from warehouses. SMM believes aluminium billet inventories will remain steady in the near future amid weak downstream demand and potential supplies.
Traditionally, Chinese end-user sectors (including building & construction and auto manufacturers) have entered the off-season in June and therefore, lowered their operating rates, resulting in an order decrease and pullback in demand.
At the end of June, domestic aluminium billet inventory will likely hover around 150,000-200,000 tonnes.
On the supply side, aluminium billet production across China stood at 1.457 million tonnes in May 2024, up 40,000 tonnes or 2.8 per cent Y-o-Y or down by 15,000 tonnes or 1 per cent M-o-M.
