7.21 SMM Cast Aluminum Alloy Morning Comment
Futures: The most-traded AD2609 cast aluminum alloy contract opened lower and consolidated on a weak note during the night session. The night session opened at 22,850 yuan/mt, reached a session high of 22,890 yuan/mt, dipped to a low of 22,730 yuan/mt, and closed at 22,840 yuan/mt, down 20 yuan/mt or 0.09% from the previous settlement price. After opening, the night session quickly dipped to a new phase low, then saw a modest recovery but with weak rebounding momentum. Prices traded below the average price line throughout the session, with bulls showing a lack of strength. Trading volume was 3,703 lots, and open interest decreased by 178 lots. Funds slightly reduced positions and exited. The KD indicator is in a weak range at a low level. Dragged by the sharp pullback in the daytime session, a heavier wait-and-see sentiment developed in the market. The night session overall maintained a narrow-range, slightly weak consolidation pattern, facing obvious resistance above and lacking effective upward momentum.
Spot-Futures Price Spread Daily: According to SMM data, on July 20, the theoretical premium of the SMM ADC12 spot price against the closing price of the most-traded cast aluminum alloy contract (AD2609) at 10:15 AM was .
Warrant Daily: SHFE data shows that as of July 20, total registered warrants for cast aluminum alloy amounted to 18,698 mt, a decrease of 2,107 mt from the previous trading day.
Industry Dynamics: (1) Aluminum Scrap Imports: According to the latest customs data, China's aluminum scrap imports in June 2026 were approximately 133,000 mt, down 16.9% YoY and 12.5% MoM, marking a decline for the third consecutive month. Cumulative imports from January to June 2026 reached 982,000 mt. (2) Aluminum Alloy Imports and Exports: Customs data showed a clear divergence in the import and export trends of China's unwrought aluminum alloy (HS 76012000) in June 2026. Imports continued to face pressure, with June imports of 55,100 mt, down 28.9% YoY and 14.7% MoM. Cumulative imports in H1 amounted to 433,500 mt, a YoY decline of 20.0%. Exports performed strongly, with June exports reaching 67,200 mt, surging 160.6% YoY and up 11.7% MoM, setting a new single-month export record. Cumulative exports from January to June reached 238,500 mt, up 98.3% YoY. Driven by continued contraction in imports and rapid growth in exports, the unwrought aluminum alloy trade turned back into a net export position in June 2026.
Aluminum Scrap: Yesterday, SMM A00 spot aluminum price closed at 23,190 yuan/mt, edging down 30 yuan/mt from the previous trading day. The aluminum scrap market remained generally stable. Regarding the price difference between A00 aluminum and aluminum scrap, on July 20, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was 2,012 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap was 698 yuan/mt, both remaining at extremely low levels. The aluminum scrap market is expected to continue its high-level, narrow-range consolidation pattern. Supply side, constraints from the reverse invoicing policy are difficult to reverse in the short term, so a tight supply of invoiced aluminum scrap will persist. Import side, multiple bearish factors are set to gradually emerge in the coming months, with supplements of high-quality overseas scrap remaining low. Demand side, as the off-season deepens, downstream operating rates stayed low, and end-user orders saw no substantial improvement. Scrap utilization enterprises continued their strategy of purchasing as needed, with little significant improvement in procurement sentiment.
Silicon Metal: On July 20, SMM prices in east China held steady for non-oxygen blown #553, #521, #441, #421, #421 for silicone use, and #3303; the price of oxygen-blown #553 fell by 50 yuan/mt. Silicon prices in Southern China, Huangpu Port, Tianjin, Sichuan, Kunming, Northwest China, Shanghai, and Xinjiang all held steady.
Markets Outside China: Current overseas ADC12 offers are in the $3,050–$3,190/mt range. Influenced by factors including a slight pullback in overseas offers, persistently firm domestic prices, and a stronger yuan against the US dollar, cost pressure from imports has eased somewhat. The price spread between Chinese and overseas markets continued to repair, with the immediate per-tonne loss on an import basis at about 882 yuan.
Summary: On Monday, the ADC12 market maintained its overall stable trend, with SMM ADC12 quotes steady at 24,100 yuan/mt from the previous trading day. The current secondary aluminum alloy market remains in the off-season. Downstream orders are limited, end-user purchasing remains need-based, and overall trading activity is subdued. Demand side support for price rises is insufficient. Meanwhile, aluminum prices consolidated narrowly and aluminum scrap price fluctuations were limited, with no obvious changes on the cost side, providing similarly weak drivers for enterprise price adjustments. Under this pattern of weak supply and demand, the market lacks new directional factors, and enterprises mostly adopt strategies of following market trends and maintaining stable pricing for shipments. Given that aluminum scrap supply remains relatively tight and cost support persists, while a demand improvement must wait for the traditional peak season, the short-term ADC12 market is expected to continue its narrow-range consolidation, with prices likely to remain mainly stable. Future monitoring should focus on aluminum price trends, aluminum scrap circulation, and the pace of downstream order recovery.
[Data Source Statement: Unless they are public information, all other data are processed by SMM based on public information, market communication, and SMM’s internal database models, and are for reference only. They do not constitute decision-making advice.]
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