SHFE Aluminum Saw Wide Swings for Multiple Days, While Alloy Followed the Uptrend Strongly [SMM Cast Aluminum Alloy Morning Comment]

3.11 SMM Morning Comment on Cast Aluminum Alloy

Futures: Overnight, the most-traded cast aluminum alloy ad2604 contract closed at 23,790 yuan/mt, up 110 yuan from the previous trading day's settlement price, or +0.46%. Open interest stood at 5,730 (-44), with trading volume at 2,545 (-2,374), and fund activity pulled back somewhat. The three lines were all near 50, the candlestick was below the D line, and the J line turned upward, indicating a short-term neutral-to-bullish fluctuating range. ყურადღ ध्यान should be paid to whether 23,690 support and 23,915 resistance are broken. If a KDJ golden cross forms, light long positions could be considered.

Spot-futures price spread daily: According to SMM data, on March 10, the theoretical premium of the SMM ADC12 spot price over the 10:15 closing price of the most-traded cast aluminum alloy contract (AD2604) was 1,305 yuan/mt.

Warrant daily: SHFE data showed that on March 10, the total registered volume of cast aluminum alloy warrants was 57,044 mt, down 1,055 mt from the previous trading day. Of this, the total registered volume in Shanghai was 5,260 mt, down 149 mt from the previous trading day; Guangdong 19,452 mt, down 361 mt; Jiangsu 7,207 mt, down 212 mt; Zhejiang 19,084 mt, down 333 mt; Chongqing 4,234 mt, up 0 mt; and Sichuan 1,807 mt, up 0 mt.

Aluminum scrap: Ongoing fluctuations in geopolitical risks drove spot primary aluminum sharply lower by 730 yuan/mt from the previous trading day today, and the aluminum scrap market collectively followed downward. In terms of the price difference between A00 aluminum and aluminum scrap, on March 10, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was 3,748 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap was 2,834 yuan/mt. The aluminum scrap market was expected to hold up well at high levels this week. Post-holiday production order was gradually restored, and supply release became further more ample, but downstream processing enterprises saw a slow recovery in orders, so overall transactions were expected to remain sluggish, with the tug-of-war between sellers and buyers intensifying in the short term. Close attention should be paid to the impact of the US-Iran conflict on primary aluminum supply and transportation, downstream resumption progress, and changes in recycling policies, while staying alert to heightened price fluctuation risks.

Silicon metal: Yesterday, SMM east China oxygen-blown #553 silicon was at 9,100-9,300 yuan/mt, and #441 silicon was at 9,300-9,600 yuan/mt, down 50 yuan/mt from the previous day. Yesterday, the futures market fluctuate rangebound near 8,600 yuan/mt and closed at 8,625 yuan/mt late in the session, down 45 yuan/mt from the previous day. Market and macro sentiment caused large fluctuations in futures prices, while downstream inquiries were weak and the market saw transactions mainly driven by rigid demand. Silicon metal prices faced resistance on the upside and cost support on the downside.

Overseas market: On imports, affected by the sharp rise in LME aluminum prices and stronger overseas demand, overseas ADC12 quotes rose to $3,240-3,320/mt, while domestic prices increased relatively less, and the import window quickly turned into a loss.

Summary: Yesterday, the SMM ADC12 price increased by 500 yuan/mt, and the market quotation center moved up significantly, with most producers raising prices by 500–600 yuan/mt. Recently, raw material prices have continued to strengthen, and the cost side has risen rapidly, providing clear upward support for enterprise quotations. However, downstream demand remained relatively stable, and most enterprises reported that orders and inquiries were generally average overall, with downstream procurement still mainly driven by restocking based on immediate needs. Supported by cost increases and market expectations, enterprises showed a relatively clear willingness to raise prices. In the short term, against the backdrop of cost support and a mild release of supply, ADC12 prices are expected to hold up well. The medium-term trend still depends on the recovery of end-use consumption. If orders in the die-casting industry increase significantly, the price center is expected to move up further; if the demand recovery falls short of expectations, coupled with a continued rise in the supply-side operating rate, prices will shift into high-level rangebound consolidation.

[Data Source Statement: Other than 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.]