Aluminum Futures Slide as East China Demand Stays Firm

Key Moments

Futures Pressure Supports Spot Buying in East China

In early trading, the SHFE aluminium 2606 contract traded at a center level that was significantly lower than during the same period of the previous trading day. As prices dropped to their lowest levels in the recent period, overall buying interest in the market improved month-on-month from yesterday, helping lift actual transaction prices.

In East China, mainstream spot deals were concluded at a discount of RMB 20-40 per tonne relative to the SHFE aluminium July contract. The East China shipment sentiment index stood at 2.9, down 0.08 month-on-month, while the purchase sentiment index reached 3.16, up 0.34 month-on-month.

Central China Market: Reluctant Sellers, Muted Downstream Demand

Against the backdrop of a continued sharp decline in SHFE aluminium futures, suppliers in the central China market showed limited willingness to sell. Traders were generally inclined to liquidate spot warrants in larger volumes, with little appetite to maintain firm offer levels.

Downstream processing companies in central China displayed weak buying interest and largely confined activity to minimal just-in-time purchases, focusing primarily on warrants. Spot market trades remained thin. The prevailing transaction price range in central China was concentrated around a discount of RMB 20-50 per tonne to the SHFE aluminium July contract.

Sentiment Indices and Inventory Dynamics

In central China, sentiment readings reflected softer market engagement. The shipment sentiment index came in at 2.89, down 0.04 month-on-month, while the purchase sentiment index was 2.14, down 0.06 month-on-month.

On the inventory side, aluminium ingot stocks in major consumption regions decreased by 1.35 today, with the bulk of the destocking occurring in Guangdong and Wuxi.

Regional Metrics Snapshot