Pre-Holiday Secondary Aluminum Prices Continued to Decline, Stocking Demand Significantly Insufficient [SMM Cast Aluminum Alloy Morning Comment]

5.6 SMM Cast Aluminum Alloy Morning Comment

Futures: The most-traded aluminum alloy contract AD2606 closed at 22,910 yuan/mt overnight, down 20 yuan/mt from the previous trading day, a decline of 0.13%. The VR value was 48.98, significantly below 100, indicating that bears maintained dominant volume during the decline, market sentiment was bearish, and volume support for a rebound was insufficient.

Spot-futures price spread daily report: According to SMM data, on April 30, the SMM ADC12 spot price was at a theoretical premium of 745 yuan/mt to the most-traded cast aluminum alloy contract (AD2606) closing price at 10:15 AM.

Warrant daily report: SHFE data showed that on April 30, total registered warrants for cast aluminum alloy were 33,319 mt, an increase of 695 mt from the previous trading day. Among them, Shanghai had a total registered volume of 1,822 mt, unchanged from the previous trading day; Guangdong had a total registered volume of 10,820 mt, down 58 mt from the previous trading day; Jiangsu had a total registered volume of 5,522 mt, up 753 mt from the previous trading day; Zhejiang had a total registered volume of 9,506 mt, unchanged from the previous trading day; Chongqing had a total registered volume of 4,143 mt, unchanged from the previous trading day; Sichuan had a total registered volume of 1,506 mt, unchanged from the previous trading day.

Aluminum scrap: On the last day before the holiday, spot primary aluminum edged down 90 yuan/mt from the previous trading day, and aluminum scrap market prices adjusted accordingly. In the first week after the Labour Day holiday, China's aluminum scrap market is expected to continue in the doldrums at high levels, with shredded aluminum tense scrap (priced based on aluminum content) mainstream range expected to remain around 20,700-21,300 yuan/mt (tax-exclusive). Supply-side policy constraints continued, and imported aluminum scrap volumes are expected to decline, weakening supply replenishment. However, as the peak season effect winds down, demand for aluminum tense scrap remains sluggish, and incremental end-user orders are expected to be limited. In the short term, attention should be paid to the progress of US-Iran negotiations, the implementation of invoice and reverse invoicing policies, and the recovery of orders at scrap utilization enterprises after the holiday.

Silicon metal: SMM east China oxygen-blown #553 silicon was at 9,000-9,200 yuan/mt, and #441 silicon was at 9,200-9,400 yuan/mt. Spot silicon metal prices were basically stable around the Labour Day holiday, while futures prices trended stronger. On fundamentals, silicon metal supply and demand were in tight balance in April, and no major adjustments to the supply-demand structure are expected in May.

Markets outside China: On the import side, ex-China ADC12 quotes remained at a high level around $3,400/mt, with per-mt instant import losses widening to over 3,000 yuan, and the theoretical import window remained closed.

Summary: On the last day before the holiday, the ADC12 market continued in the doldrums overall. Affected by primary aluminum price pullbacks and weak downstream demand, enterprises actively lowered offers slightly, and the mainstream transaction center shifted downward. Meanwhile, as the Labour Day holiday approached, downstream enterprises successively entered production suspension or production cuts mode, pre-holiday stocking demand was clearly insufficient, and market trading atmosphere turned sluggish. In the short term, ADC12 prices are likely to remain in the doldrums, and post-holiday attention should focus on the pace of downstream production resumption and demand recovery.

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