Aluminium Price Rise in East China Stymies Spot Market Trades

Aluminium Price Rise in East China Stymies Spot Market Trades

A sudden rise in aluminium futures prices led to sellers’ reluctance to offload cargoes, slowing spot trades in East China on Monday.

According to reporting by SMM, the Shanghai Futures Exchange saw the front-month September contract rise on Monday, gaining back ground lost on Friday evening. Spot trades fell in a range between CNY14,270 and CNY14,290 per metric ton in both Shanghai and Wuxi, while the premium over the SHFE 1909 contract shrunk to just CNY10 per metric ton. Meanwhile, spot trading in Hangzhou was scarce for the entirety of the day.

Earlier in the day trading was conducted between CNY14,230 and CNY14,240 per metric ton in Shanghai and Wuxi. Premiums over the futures contract sat at between CNY10 and CNY20 per metric ton.

In addition to holding aluminium cargoes off the market, the bump in prices chilled downstream consumers from purchasing in the new week. This, in turn, kept trades of spot aluminium in East China tepid throughout the day.

The story was quite different in South China, as spot aluminium trades showed a strong rebound. Aluminium traders witnessed downstream consumers shoring up raw aluminium inventory, prompting a flurry of buying and selling.

Guangdong saw spot trades fall in the range of CNY14,250 and CNY14,260 per metric ton on Monday morning, rising to CNY14,270 to CNY14,290 later in the day. Premiums over the SHFE 1909 contract rose as high as CNY20 per metric ton over the course of the day.