Shanghai Nonferrous Metals News
The domestic primary aluminium market has ample supply at present as most domestic primary aluminium smelters remained operational during the CNY holiday and new primary aluminium capacities from Yunnan and IM have gradually been coming online. According to SMM, primary aluminium inventory at domestic warehouses rose to 1.31 mln t on Monday 24th February, up by 84 kt from last Thursday. Looking forward, domestic social inventory is likely to climb further in the wake of continued new arrivals and weak deliveries.
According to SMM, the overall resumption rate of manufactures has exceeded 50% in most cities and provinces, with relatively high rates exceeding 80% in Zhejiang, Shandong and Jiangxi. SMM forecast February’s primary aluminium smelter operational rates as averaging 89.5% and 52.5% for downstream aluminium processers. The large gap in operational rates may lead to a supply surplus in the short term. Furthermore, despite improved logistics in most regions, traffic restrictions in some areas such as Shandong are still being strictly maintained, resulting in low transport efficiency and slow deliveries. Downstream aluminium processers intend to consume their existing stocks first instead of sourcing new supplies.
