6.22 SMM Secondary Cast Aluminum Alloy Morning Comment
Futures: Last Friday overnight, SHFE base metals were closed for the Dragon Boat Festival holiday.
Spot-Futures Price Spread Daily: According to SMM data, on June 18, the theoretical premium of SMM ADC12 spot price to the 10:15 closing price of the most-traded secondary cast aluminum alloy futures contract (AD2608) was .
Warrant Daily: SHFE data showed that on June 18, total registered warrants for secondary cast aluminum alloy were 33,785 mt, a decrease of 2,170 mt from the previous trading day. Specifically, registered warrants in Shanghai totaled 2,956 mt, down 389 mt; in Guangdong 5,622 mt, down 483 mt; in Jiangsu 7,775 mt, flat; in Zhejiang 11,211 mt, down 817 mt; in Chongqing 5,376 mt, down 481 mt; in Sichuan 845 mt, flat.
Aluminum Scrap: On June 18, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was 2,347 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap was 1,696 yuan/mt. Enterprise tax costs rose by over 2% YoY. The continued narrowing of the price difference between A00 aluminum and aluminum scrap reflects firm bottom-side support for aluminum scrap. This week, the aluminum scrap market is expected to continue hovering at highs with a weaker bias. The tightness in compliant invoiced supply persists, and combined with widening production cuts and shutdowns, expectations of tightening aluminum scrap supply are strengthening, providing a floor for prices. On the demand side, downstream orders for secondary cast aluminum alloy remain sluggish, and purchasing support for wrought aluminum alloy has also weakened. End-use consumption is unlikely to see a material improvement. The supply-demand weakness on both sides of the aluminum scrap market is unlikely to reverse in the short term.
Inventory: According to SMM statistics, last Thursday, domestic social inventory of secondary aluminum alloy ingots fell 5,600 mt WoW to 53,100 mt, marking the third consecutive week of decline.
Silicon Metal: Before the holiday, SMM assessed oxygen-blown #553 silicon in east China at 9,100-9,200 yuan/mt, and #441 silicon at 9,300-9,400 yuan/mt. The most-traded futures contract hovered near 8,550 yuan/mt, trending weaker compared to earlier. On the supply side, quotes from silicon enterprises mostly remained stable. With relatively strong certainty around supply-demand variables in the near term, market sentiment in buy-sell negotiations stayed rational. The silicon metal price center is expected to remain in the lower range of the interval in the near term.
Markets Outside China: Import ADC12 offers pulled back slightly to $3,300-3,380/mt, and per-tonne immediate import losses narrowed to around 2,600 yuan, easing the price inversion, though the theoretical import window remains closed.
Summary: Last Friday, the overall ADC12 market continued its stable price trend. SMM ADC12 held steady at 24,100 yuan/mt. In the short term, ADC12 prices are expected to hover at highs: the downside is limited, underpinned by tight aluminum scrap, tax invoice constraints, and high costs, while the upside lacks upward momentum due to weak end-use demand. Going forward, focus on two key variables—whether end-use demand can stage a substantive recovery in the H2 peak season, and the ongoing constraint on supply from invoice oversight. If peak-season demand picks up while supply releases are restricted, the supply-demand balance will tighten, giving ADC12 further upside room. Conversely, if demand falls short of expectations, prices will move sideways in a narrow range.
[Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and SMM’s internal database models, and are for reference only. They do not constitute any decision-making advice.]
![Aluminum futures saw a slight correction, and the market trading atmosphere was mainly sluggish [SMM Spot Aluminum Midday Review]](https://imgqn.smm.cn/usercenter/ifCaw20251217171652.jpg)
