Continuous inventory buildup coupled with weak demand, resulting in sluggish growth in spot price of ADC12 [SMM Morning Comment on Cast Aluminum Alloy]

SMM Morning Comment on Cast Aluminum Alloy, June 12

Futures Market: Overnight, the most-traded AD2511 cast aluminum alloy futures contract opened at 19,435 yuan/mt, with a high of 19,450 yuan/mt, a low of 19,355 yuan/mt, and closed at 19,395 yuan/mt. It fell by 5 yuan/mt or 0.03% from the previous settlement price. Trading volume reached 4,624 lots, and open interest stood at 10,382 lots.

Spot-Futures Price Spread Daily Report: According to SMM data, on June 11, the SMM ADC12 spot price was at a theoretical premium of 525 yuan/mt over the closing price of the most-traded cast aluminum alloy futures contract (AD2511) at 10:15 a.m.

Industry News: 1. On the evening of June 10, multiple automakers announced that they would strictly adhere to the revised "Regulations on Ensuring Payments to Small and Medium-sized Enterprises" by the State Council. Starting immediately, they would uniformly compress the payment terms for suppliers to within 60 days, thereby promoting efficient capital flow within the industry chain and supporting the development of small and medium-sized enterprises. 2. According to CAAM data, in May, automobile production and sales reached 2.649 million units and 2.686 million units respectively, up 1.1% and 3.7% MoM, and up 11.6% and 11.2% YoY. Among them, NEV production and sales reached 1.27 million units and 1.307 million units respectively, up 35% and 36.9% YoY. NEV sales accounted for 48.7% of total new car sales.

Aluminum Scrap: On Wednesday, aluminum scrap prices generally followed the rise in primary aluminum prices. Baled UBC aluminum scrap was quoted at 15,050-15,550 yuan/mt (tax not included), while shredded aluminum tense scrap was quoted at 15,700-17,200 yuan/mt (tax not included). Regionally, Shanghai, Jiangsu, Shandong, and other regions closely tracked aluminum prices, with price adjustments ranging from 200-250 yuan/mt. In Jiangxi, Foshan, Guizhou, and other regions, price adjustments lagged behind aluminum prices, ranging from 100-150 yuan/mt. By product, prices for baled UBC and mixed aluminum extrusion scrap free of paint generally increased by 50-100 yuan/mt, while prices for bare bright aluminum wire and shredded aluminum tense scrap rose by 200 yuan/mt. It is expected that the aluminum scrap market will continue to fluctuate at highs, with the tight supply of aluminum tense scrap remaining unchanged and prices well supported. Wrought aluminum alloy scrap will continue to fluctuate rangebound with primary aluminum.

Overseas Markets: On June 11, the CIF import price of ADC12 continued to rise slightly to 2,400-2,420 US dollars/mt. The import spot price was reported around 19,100 yuan/mt, with the immediate import loss widening again to 600 yuan/mt. The local ADC12 price in Thailand (tax not included) was 81-81.5 Thai baht/kg.

Inventory: According to SMM statistics, on June 11, the combined daily social inventory of secondary aluminum alloy ingots in Foshan, Ningbo, and Wuxi totaled 16,183 mt, an increase of 279 mt from the previous trading day, with inventory buildup continuing.

Summary: Yesterday, the SMM A00 aluminum price rose by 240 yuan/mt from the previous trading day to 20,400 yuan/mt. The domestic SMM ADC12 price remained stable within the range of 19,800-20,000 yuan/mt. Yesterday, the secondary aluminum alloy market generally held steady quotes or rose by 100 yuan/mt. Currently in the off-season, market transactions were average, and weak demand continued to suppress the upside room for prices, while the cost side provided some support. In the short term, the spot price of ADC12 is expected to fluctuate rangebound, and the inverted price pattern with A00 will continue.

[The information provided is for reference only. This article does not constitute direct advice for investment research decisions. Clients should make cautious decisions and should not use this as a replacement for independent judgment. Any decisions made by clients are unrelated to SMM.]

》Click to view the SMM aluminum industry chain database

》Subscribe to view historical spot metal prices from SMM