3.26 SMM Morning Comment on Cast Aluminum Alloy
Futures: Overnight, the most-traded cast aluminum alloy 2605 contract closed at 22,860 yuan/mt, down 70 yuan/mt from the previous trading day's close, a decline of 0.31%. Prices have gradually moved higher recently, rebounding to around 23,015, and are currently consolidating in the 22,800-23,000 range. The three moving averages have all diverged upward from low levels, while the J line has risen above around 80, indicating relatively strong short-term bullish momentum, though caution is warranted over pullback risks after overbought conditions. Prices fluctuated in the 22,800-23,000 range. If they hold above 23,015, further gains are possible; if they fall below 22,725, they may return to weakness. Current trading volume and open interest both declined, indicating strong wait-and-see sentiment in the market. The rebound requires confirmation from increased volume; otherwise, prices could retreat after rapid rise.
Spot-Futures Price Spread Daily: According to SMM data, on March 25, the theoretical spot-futures price spread of SMM ADC12 spot prices over the 10:15 closing price of the most-traded cast aluminum alloy contract (AD2605) was 1,560 yuan/mt.
Warrant Daily: SHFE data showed that on March 25, the total registered volume of cast aluminum alloy warrants was 42,944 mt, down 2,519 mt from the previous trading day. Among them, total registered volume in Shanghai was 2,635 mt, down 120 mt from the previous trading day; Guangdong 16,686 mt, down 571 mt; Jiangsu 3,608 mt, down 601 mt; Zhejiang 12,565 mt, down 1,107 mt; Chongqing 3,664 mt, down 60 mt; and Sichuan 1,267 mt, down 60 mt.
Aluminum Scrap: On Wednesday, spot primary aluminum rose 290 yuan/mt from the previous trading day, and the aluminum scrap market generally followed higher. To correct aluminum scrap prices that had deviated from actual market transaction levels amid wild swings in aluminum prices, some alloy enterprises in Jiangxi and Anhui made substantial adjustments to prices for aluminum tense scrap categories such as shredded aluminum tense scrap and ADC12 aluminum shavings, with single-day increases of 500-700 yuan/mt. In terms of the price difference between A00 aluminum and aluminum scrap, on March 25, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was 2,855 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap was 1,565 yuan/mt. The aluminum scrap market was expected to enter a weak consolidation phase this week, with the mainstream range for shredded aluminum tense scrap (priced based on aluminum content) running around 19,800-20,500 yuan/mt (excluding tax). In the short term, close attention is still needed on the impact of geopolitical conflicts on primary aluminum price fluctuations, the actual recovery of end-user orders, and the actual implementation progress of supply-side policies, while remaining alert to the risk of wild price swings.
Silicon Metal: On March 25, SMM east China non-oxygen blown #553 was unchanged from the previous day; oxygen-blown #553 was unchanged from the previous day; #521 was unchanged from the previous day; #441 was unchanged from the previous day; #421 was unchanged from the previous day; #421 for silicone use was unchanged from the previous day; and #3303 was unchanged from the previous day. Silicon prices in Huangpu Port, Tianjin, Shanghai, Northwest China, Xinjiang, Kunming, and Sichuan remained stable.
Markets outside China: In markets outside China, current overseas ADC12 quotations were still in the range of $3,220-3,260/mt, with immediate import losses continuing at around 2,000 yuan, and the theoretical import window remained closed.
Summary: Spot side, yesterday the secondary aluminum alloy market was driven by the futures rebound, and quotations were raised slightly, with mainstream increases of 100 yuan/mt. Some enterprises raised prices in line with the trend to recover previous declines, and market sentiment recovered slightly from the previous period. However, transaction performance remained weak, with downstream mainly purchasing as needed and showing limited acceptance of high prices, constraining upside room for prices. In the short term, ADC12 prices are expected to fluctuate rangebound, and further gains will still require substantial improvement on the demand side.
[Data source declaration: 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, for reference only and not as decision-making advice.]
