ADC12 Prices Accelerated Rise to Hit Highs in January, Center Expected to Pull Back in February [SMM Analysis]

First, a review of the secondary aluminum alloy price trend in January:  
Futures market: At the beginning of January, bulls increased their positions, driving the price of the most-traded cast aluminum alloy futures contract to rise rapidly, breaking through the previous platform and hitting a new high of 24,410 yuan/mt; after mid-month, divergence at high levels intensified, and the futures market shifted into considerable fluctuations. From month-end to early February, the futures market pulled back significantly from the highs, with short-term fluctuations intensifying.  
Spot side: In January, ADC12 prices accelerated their rise along with the strength in aluminum prices; although there has been a recent pullback, prices overall remain at high levels.  
Price spread side: At the beginning of January, ADC12 was at a deep discount to A00; during the subsequent futures pullback, supported by ADC12 holding prices firm, the spread quickly narrowed and temporarily turned into a slight premium. As of February 9, the SMM ADC12 quotation was 23,650 yuan/mt, a cumulative increase of 550 yuan/mt from early January, and the average price in January was up 10% MoM from the previous month. 

Entering February, the ADC12 price center is expected to shift slightly lower, but overall it is likely to hover at highs. On the cost side, aluminum prices remain at a relatively high level, and aluminum scrap supply is tight around the holiday, providing some support to prices. However, concentrated shutdowns during the Chinese New Year holiday led to simultaneous contraction in demand and supply, with spot transactions noticeably weakening, and the market temporarily exhibiting a "price without market" characteristic. Around the holiday, manufacturers focused mainly on destocking and maintaining prices while adopting a wait-and-see approach, showing little initiative to adjust prices. If downstream work resumption proceeds at a slow pace after the holiday and aluminum scrap supply gradually recovers, cost support will weaken marginally, limiting upside room for prices. However, against the backdrop of delayed supply recovery, downside room is also limited. ADC12 prices are expected to fluctuate at highs with adjustments in February, with a projected range of 23,000–24,000 yuan/mt. Close attention should be paid to the strength of post-holiday demand recovery and changes in the raw material sector.