Aluminum Prices Stabilized but Failed to Change Wait-and-See Sentiment, Short-Term Fluctuations to Continue [SMM Cast Aluminum Alloy Morning Comment]

3.25 SMM Morning Comment on Cast Aluminum Alloy

Futures: Overnight, the most-traded cast aluminum alloy ad2605 contract closed at 22,855 yuan/mt, up 270 yuan/mt from the previous trading day's close, or 1.20%. Trading volume was 1,925 lots (-3,302 lots), and open interest was 3,979 lots (-69 lots), showing a pattern of lower volume and lower open interest. The three lines formed a bullish crossover upward at low levels, indicating that short-term bullish momentum was building and a rebound signal had emerged. The VR value was 69.3, at a relatively low level, suggesting insufficient current market activity and low capital participation, which may limit the strength of the rebound.

Spot-futures price spread daily: According to SMM data, on March 24, the theoretical premium of the SMM ADC12 spot price over the 10:15 closing price of the most-traded cast aluminum alloy contract (AD2605) was 1,740 yuan/mt.

Warrant daily: SHFE data showed that on March 24, the total registered volume of cast aluminum alloy warrants was 42,944 mt, down 2,047 mt from the previous trading day. Among them, total registered volume in Shanghai was 2,755 mt, down 422 mt from the previous trading day; Guangdong was 17,257 mt, down 210 mt; Jiangsu was 4,209 mt, down 813 mt; Zhejiang was 13,672 mt, down 483 mt; Chongqing was 3,723 mt, down 119 mt; and Sichuan was 1,327 mt, increase 0 mt from the previous trading day.

Aluminum scrap: On Monday, spot primary aluminum rose 30 yuan/mt from the previous trading day, while the aluminum scrap market was broadly flat. Amid wild swings in current aluminum prices, aluminum scrap yards showed stronger willingness to hold back cargoes, highlighting the resilience of aluminum scrap prices. In terms of the price difference between A00 aluminum and aluminum scrap, on March 24, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was 2,908 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap was 1,618 yuan/mt. The aluminum scrap market is expected to enter a weak consolidation phase this week, with the mainstream range for shredded aluminum tense scrap (priced based on aluminum content) hovering at 19,800-20,500 yuan/mt (excluding tax). In the short term, close attention is still needed on the impact of geopolitical conflicts on fluctuations in primary aluminum prices, the actual recovery of end-user orders, and the actual implementation progress of supply-side policies, with vigilance against the risk of wild swings in prices.

Silicon metal: Spot silicon metal prices remained in stagnant consolidation. Yesterday, SMM east China oxygen-blown #553 silicon was at 9,100-9,300 yuan/mt, and #441 silicon was at 9,300-9,500 yuan/mt, flat from the previous day. Some silicon enterprises quoted slightly below trading firms engaging in both spot and futures market, while downstream users mainly purchased at lower prices, and overall market trading sentiment was inactive.

Markets outside China: Current overseas ADC12 quotes have pulled back to the $3,220-3,260/mt range, and immediate import losses continued to hold at around 2,000 yuan, with the theoretical import window remaining closed.

Summary: In the spot market, the overall ADC12 market yesterday continued to operate in a stable price pattern. Aluminum prices showed signs of bottoming out, but market sentiment recovered only to a limited extent, and enterprises generally chose to temporarily hold off on price adjustments and mainly adopt a wait-and-see stance. Demand side, downstream order improvement was not obvious, and just-in-time procurement remained the main approach, with mediocre transaction performance. Against the backdrop of easing cost-side fluctuations and insufficient demand support, ADC12 prices may continue to fluctuate within a relatively stable range in the short term, with relatively limited momentum for price adjustments. Going forward, attention should still be paid to aluminum price trends and the recovery of end-use demand.

[Data Source Statement: Except for public information, all other data is processed and derived by SMM based on public information, market communication, and SMM's internal database models, and is for reference only and does not constitute decision-making advice.]