Overseas ADC12 Prices Surged to USD 3,200, Import Losses Expanded Sharply [SMM Cast Aluminum Alloy Morning Comment]

3.6 SMM Cast Aluminum Alloy Morning Comment

Futures: In the overnight session, the aluminum alloy 2604 contract moved downwards after a higher opening and fluctuated downward. After opening at 23,295 yuan/mt, it rose to 23,420 yuan/mt, then continued to pull back, bottoming at 23,000 yuan/mt, and closed at 23,170 yuan/mt late in the session, down 1.07% from the previous close. Open interest continued to decline, with a notable reduction in long positions; trading volume edged up, and the price center moved lower.

Spot-Futures Price Spread Daily: According to SMM data, on March 5, the theoretical premium of the SMM ADC12 spot price over the 10:15 closing price of the most-traded cast aluminum alloy contract (AD2604) narrowed to 920 yuan/mt.

Warrant Daily: SHFE data showed that on March 5, total registered cast aluminum alloy warrants were 60,182 mt, down 932 mt from the previous trading day. Of this total, Shanghai registered 5,706 mt, down 240 mt; Guangdong 20,879 mt, down 29 mt; Jiangsu 7,718 mt, down 212 mt; Zhejiang 20,349 mt, down 391 mt; Chongqing 4,354 mt, down 30 mt; and Sichuan 1,173 mt, down 30 mt.

Aluminum scrap: This week, China’s aluminum scrap market basically fully resumed normal production and shipment, but amid the impact of US-Iran geopolitical tensions, prices moved in tandem with primary aluminum and showed strong follow-up gains. As of March 5, 2026, the SMM A00 aluminum price closed at 25,120 yuan/mt, up a cumulative 1,710 yuan/mt for the week. Mainstream aluminum scrap categories were raised in tandem: baled UBC closed at 18,100-18,600 yuan/mt (tax excluded), and shredded aluminum tense scrap (priced based on aluminum content) closed at 20,500-21,050 yuan/mt (tax excluded). As for the price difference between A00 aluminum and aluminum scrap, on February 5, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was 3,688 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap was 2,881 yuan/mt. Supply side, after the Lantern Festival, domestic aluminum scrap yards basically resumed a normal pace of shipments, but amid rising raw material costs and tighter enforcement of the reverse invoicing policy, compliant supply was tight, triggering a scramble in the market. Demand side, downstream scrap utilization enterprises saw post-holiday order recovery and operating rates fall short of expectations; willingness to restock was weak, with purchases still mainly driven by rigid demand. Only a small number of traders engaged in stockpiling and held back sales, waiting for prices to rise, and the pattern of weak supply and weak demand persisted. The aluminum scrap market is expected to hold up well at elevated levels next week, with the mainstream range for shredded aluminum tense scrap (priced based on aluminum content) hovering between 20,300 and 20,900 yuan/mt (tax excluded). Post-holiday production order gradually recovered, and supply release further eased, but downstream processing enterprises saw slow order recovery; overall transactions are expected to remain sluggish, and the tug-of-war between sellers and buyers is set to intensify in the short term. Close attention should be paid to the impact of the US-Iran conflict on primary aluminum supply and transportation, downstream work-resumption progress, and changes in recycling policies, and be alert to the heightened risk of price fluctuations.

Silicon metal: Boosted by bullish market news, silicon metal futures prices stabilized and recovered. The most-traded silicon metal contract closed yesterday at 8,565 yuan/mt. Quotes from silicon enterprises were steady or raised by around 100 yuan/mt, and east China oxygen-blown #553 silicon was quoted around 9,100-9,200 yuan/mt. With more downstream players staying on the sidelines, the market saw more purchasing as needed, and silicon metal prices fluctuated and consolidated with limited upside room. Social inventory: According to SMM statistics, as of March 5, total social inventory of silicon metal in major regions stood at 553,000 mt, down 7,000 mt WoW (excluding Inner Mongolia, Ningxia, Gansu, and other regions).

Overseas market: Overseas ADC12 quotes surged sharply to $3,190-3,250/mt, while the domestic price increase lagged behind, and spot import losses quickly widened to more than 1,000 yuan.

Summary: The secondary aluminum alloy market continued its uptrend today, with producers generally raising quotes by 300-600 yuan/mt. SMM ADC12 prices have risen to 24,700-24,900 yuan/mt. Cost support was significant. Driven by elevated raw material prices and losses on earlier low-priced orders, enterprises’ willingness to raise prices strengthened markedly; even with limited downstream acceptance, they still proactively increased prices in line with the market. Currently, high prices have clearly suppressed downstream procurement, with replenishment mainly via small orders for rigid demand, and overall transactions were relatively sluggish. In the short term, ADC12 prices are expected to hold up well: on the one hand, tensions in the Middle East have intensified, and aluminum capacity in Qatar, Bahrain, Mozambique, and other regions faces shutdown risks, with overseas supply disruptions strengthening bullish sentiment; on the other hand, domestic production resumptions have been slow, supply releases fell short of expectations, and together with strong cost support, downside room for prices was limited. Going forward, market focus will shift to the actual realization of end-use demand: if downstream orders are released significantly and primary aluminum prices remain strong, the ADC12 price center is expected to move further higher; if demand recovery is insufficient, the market will most likely shift into a fluctuating consolidation phase.

[Data Source Statement: Other than public information, all data are processed by SMM based on public information and market communication, relying on SMM’s internal database models, for reference only and not constituting decision-making advice.]