Aluminium ingots inventories in South China’s Guangdong province stood at 243,400 tonnes, as of April 30, down 191,400 tonnes or 44 per cent from a month earlier. Record-high shipments from warehouses and strong consumption amid low arrivals of stocks were the two primary reasons behind the dip in inventories.
SMM data showed that around 282,700 tonnes of aluminium ingots were shipped from Guangdong warehouses in April, up 81.21 per cent month-on-month and 49.58 per cent year-on-year. This recorded the highest level over the past five years.
Better-than-expected orders from downstream consumers and lower prices of ingots prompted the higher consumption of aluminium ingots.
Meanwhile, arrivals of aluminium ingots plunged 65.06 per cent from a month ago to 91,300 tonnes in April, owing to reduced production as rising processing charges of aluminium billet drove primary aluminium smelters to turn to molten aluminium.
SMM expects aluminium ingot inventories in Guangdong to decline further in the weeks ahead as supply is unlikely to rebound significantly in the near term while downstream consumption to remain active.
But as of May 6, aluminium ingots stocks in Guangdong stood higher from April 30 at 244,800 tonnes, backed by nearly 20,000 tonnes of stock arrivals over the extended weekend.
However, the overall social inventories of primary aluminium ingots across eight major consumption areas in China, including SHFE warrants, decreased 32,000 tonnes from Thursday, April 30, to 1.172 million tonnes on May 6, according to SMM.