Chinese aluminium alloy price still shows restraint against extended drop in billet inventories; ingot price records a p

According to the data by Shanghai Metals Market, stocks of 6063 aluminium billet across five major consumption areas in China dropped by some 11,300 tonnes over the weekend ended on Thursday, November 8 to stand at 129,800 tonnes.

SMM believes downstream buyers stockpiled as prices dipped over the week and this accounted for the decline in stocks.

In Foshan, Guangdong, the inventory dropped by some 6,600 tonnes to stand at 66,300 tonnes on November 8 while in Huzhou, Zhejiang and Nanchang, Jiangxi, the inventories dropped by 3,200 tonnes and 3,400 tonnes to hover at 9,500 tonnes and 13,900 tonnes, respectively. Some other inventories like in Wuxi, Jiangsu, on the other hand, recorded a surge. The below chart shows the inventory status across major China markets in more details:

But similar to the previous week, the price of aluminium alloys (ADC12) recorded no change on November 8, despite a fall in billet inventories. The price is still hovering at RMB 15,400 per tonne since the first day of the month. The average prices are expected to range between RMB 15,300 per tonne and RMB 15,500 per tonne.

The prices of aluminium alloy (A356) and aluminium alloy (A380) neither registered any change from RMB 14,550 per tonne and RMB 16,150 per tonne, respectively after November 5. Their average prices are expected to hover between RMB 14,500 per tonne and RMB 14,600 per tonne, and RMB 16050 per tonne and RMB 16250 per tonne.

Another reason for the restraint in aluminium alloy price could be the lack of strong support from A00 aluminium ingot in terms of price. Today, on November 9, the ingot price again dropped to RMB 13,860 per tonne after a little rise to RMB 13,890 per tonne from RMB 13,810 per tonne on November 8. The average prices are expected to range between RMB 13,840 per tonne and RMB 13,880 per tonne, with spot discounts at RMB 50 per tonne to RMB 10 per tonne.

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