During the week, due to the recovery of transportation capacity in Xinjiang, warehouse arrivals increased significantly, leading to a slight inventory buildup. By region, due to the cycle and sequence of railway transportation, the aluminium billet inventories in Wuxi and Nanchang increased first, while no significant increase in inventory was observed in the Foshan area.
However, the current price spread in processing fees between the east China and south China markets is RMB 200-300 per tonne, and subsequent logistics directions for aluminium billets will prioritise shipments to the south China region. On the consumption side, amid weakening year-end consumption and the suppression of persistently high aluminium prices, market transactions are transitioning to weakness. Additionally, with renewed pressure from the supply side, processing fees in some regions are under significant pressure.
SMM expects that with continuous shipments from the Xinjiang region, aluminium billets will continue to arrive and exert sustained pressure on the supply side. Meanwhile, due to insufficient year-end consumption expectations on the demand side, the market will experience a significant oversupply, and aluminium billets will maintain a phased inventory buildup pace, with inventories expected to range between 120,000-140,000 tonnes next week.
