Aluminum Scrap Prices Follow Upward Trend but with Regional Divergence Market Supply Increases [SMM Cast Aluminum Alloy Morning Comment]

3.3 SMM Cast Aluminum Alloy Morning Comment   

Futures: The most-traded AD2604 aluminum alloy contract opened higher and retreated after a rapid rise, touching a high of 23,305 yuan/mt before fluctuating downward, reaching a low of 22,940 yuan/mt, and rebounding slightly at the close. It finally closed at 230,450 yuan/mt, down 135 yuan/mt from the previous close, a decline of 0.58%. The futures showed a pattern of moving downwards after a higher opening, with short-term bullish momentum weakening. Trading volume remained low, and open interest decreased slightly, indicating cautious trading.

Spot-Futures Price Spread Daily Report: According to SMM data, on March 2, the theoretical premium of the SMM ADC12 spot price over the closing price of the most-traded casting aluminum alloy contract (AD2604) at 10:15 was 1,105 yuan/mt.

Industry News: On March 2, 2025, the State Taxation Administration released six measures for addressing tax issues related to irregular investment attraction and serving the construction of a unified national market. The core is to curb disorderly competition, standardize market order, and facilitate factor mobility by conducting special governance on tax issues related to irregular investment attraction, implementing regulations on tax information reporting for platform enterprises, deepening cross-regional tax services reform, adjusting the tax location for restricted shares, strictly controlling the transfer of tax sources in policy depressions, and unifying the execution standards of tax policies. Follow-up work will continue to better serve the construction of a unified national market.

Warrant Daily Report: SHFE data shows that on March 2, the total registered amount of cast aluminum alloy warrants was 63,103 mt, a decrease of 1,351 mt from the previous trading day. In Shanghai, the total registered amount was 6,160 mt, down 269 mt; in Guangdong, it was 21,454 mt, down 393 mt; in Jiangsu, it was 8,260 mt, down 419 mt; in Zhejiang, it was 21,402 mt, down 180 mt; in Chongqing, it was 4,564 mt, down 30 mt; and in Sichuan, it was 1,293 mt, down 60 mt.

Aluminum Scrap: On Monday, the spot primary aluminum price rose 210 yuan/mt MoM, and the overall aluminum scrap market followed suit, but regional differences remained significant. In terms of the price difference between A00 aluminum and aluminum scrap, on March 2, the price difference in Foshan for mixed aluminum extrusion scrap free of paint was 3,318 yuan/mt, and in Jiangsu, the price difference for bare bright aluminum wire was 1,211.3 yuan/mt. Regions such as Shandong, Jiangxi, and Hunan saw larger increases, while other regions were more cautious. This week, the aluminum scrap market is expected to hover at highs, with shredded aluminum tense scrap (priced based on aluminum content) mainly operating within the range of 19,000-19,600 yuan/mt (excluding tax). Supply side, cargo yards are gradually resuming full operations, and the release of supplies will increase, but recycling policies still constrain liquidity. Demand side, the pace of resumption of production at downstream enterprises is accelerating, and restocking demand is expected to be slowly released. The tug-of-war between sellers and buyers continues, and market trading sentiment will gradually recover but remain sluggish. It is necessary to closely monitor the progress of downstream resumptions, primary aluminum price trends, and changes in recycling policies, and be vigilant about the risk of price fluctuations.

Silicon metal: On March 2, SMM east China non-oxygen blown #553 was at 9100-9200 yuan/mt; oxygen-blown #553 was at 9000-9300 yuan/mt; #521 was at 9300-9400 yuan/mt; #441 was at 9200-9500 yuan/mt; #421 was at 9500-9700 yuan/mt; #421 for silicone use was at 9700-10000 yuan/mt; #3303 was at 10200-10400 yuan/mt. In Kunming and Xinjiang regions, some silicon prices were still slightly lowered. Silicon prices in Huangpu Port, Tianjin, Northwest, Sichuan, and Shanghai remained stable.

Overseas market: Overseas ADC12 quotes rose to the $2950-3000/mt range, while domestic prices did not increase as much, narrowing the import profit and loss to a balanced level.

Summary: On Monday, the overall quotations in the secondary aluminum alloy market were raised. Before noon, manufacturers generally increased prices by 100 yuan/mt, and some companies, supported by expectations of rising prices and low finished product inventories, raised prices by up to 200 yuan/mt. In the afternoon, futures surged, further strengthening market sentiment, and some manufacturers followed suit with another price hike, with the cumulative daily increase ranging from 100 to 400 yuan/mt. As enterprises gradually resume production, market supply is gradually recovering, and the willingness to sell has increased; however, the post-holiday resumption of downstream operations is relatively mild, and order releases are still cautious, with purchases mainly driven by rigid demand, resulting in average overall transaction performance. Price increases are more reflective of sentiment and cost-driven factors. Overall, in the short term, ADC12 prices are expected to hold up well. Before the full realization of the resumption of production, the release of supply is relatively slow, coupled with cost support, limiting the downside room. Subsequently, as enterprises fully resume production, the market's focus will gradually shift from the supply side to the fulfillment of end-use consumption. If terminal orders see a phased increase and primary aluminum maintains a strong upward trend, there is still room for the ADC12 price center to move higher; if demand recovery falls short of expectations, prices may continue to fluctuate and consolidate.

[Data source statement: Apart from public information, other data is processed by SMM based on public information, market communication, and SMM's internal database model, and is for reference only and does not constitute decision-making advice.]