July 23 SMM Cast Aluminum Alloy Morning Comment
Futures: Overnight, the most-traded aluminum alloy 2609 contract drifted higher during the night session. The night session opened at 23,025 yuan/mt, reached an intraday high of 23,105 yuan/mt and a low of 23,005 yuan/mt, and closed at 23,055 yuan/mt, up 60 yuan/mt or 0.26% from the previous settlement price. After slight fluctuations at the open, prices surged before pulling back somewhat, holding above the average price line throughout the session, and maintained a firm tone towards the close. Night session trading volume totaled 2,402 lots, while open interest fell by 93 lots. The tug-of-war between longs and shorts eased, with solid support underneath but resistance still above; bulls lacked momentum for an upside breakout, resulting in an overall pattern of drifting higher within a range.
Spot-Futures Price Spread Daily: According to SMM data, as of the 10:15 AM closing price on July 22, the theoretical spot premium of SMM ADC12 spot prices over the most-traded cast aluminum alloy contract (AD2609) stood at 1,050 yuan/mt.
Warrant Daily: SHFE data showed that total registered warrants for cast aluminum alloy stood at 18,183 mt on July 22, a decrease of 272 mt from the previous trading day.
Aluminum Scrap: On Wednesday, SMM A00 spot aluminum prices closed at 23,170 yuan/mt, edging up 90 yuan/mt from the previous trading day, while the overall aluminum scrap market remained steady. Regarding price spreads, on July 22, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was 2,171 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap stood at 857 yuan/mt, both remaining at extremely low levels. Supply-side constraints continued to intensify, as the impact of the reverse invoice policy deepened further, and the scarcity of compliant invoiced aluminum scrap continued to rise. On the import front, China's aluminum scrap imports totaled approximately 133,000 mt in June 2026, down 16.9% YoY and 12.5% MoM, marking three consecutive months of decline. Cumulative imports for January-June reached 982,000 mt. As overseas aluminum scrap quotes continued to pull back, orders for aluminum scrap imported from Southeast Asia to Guangdong increased recently compared with before, and the import window improved further from the prior period. Nevertheless, new transactions remained concentrated mainly among a portion of low-priced materials and long-term clients, with trading activity in the spot market still relatively limited.
Silicon Metal: On July 22, SMM non-oxygen blown #553 prices in east China held steady at 9,050 yuan/mt; oxygen-blown #553 prices were lowered by 50 yuan/mt to 9,050 yuan/mt; #521 prices held steady; #441 prices held steady; #421 prices held steady; #421 silicone-grade prices held steady; and #3303 prices were lowered by 50 yuan/mt.
Markets Outside China: Overseas ADC12 quotes edged down slightly once again, staying within the $3,050–$3,160/mt range. Influenced by a combination of factors—slightly lower overseas quotes, persistent strength in domestic prices, and a stronger yuan against the US dollar—import cost pressure eased somewhat. The price spread between Chinese and overseas markets continued to mend, with the immediate import loss standing at about 834 yuan/mt.
Summary: On Wednesday, overall ADC12 market quotes remained largely stable. On the cost side, driven by slightly stronger primary aluminum prices, some aluminum scrap prices followed the uptrend, providing enhanced cost support for secondary aluminum alloys. However, improvement on the demand side remained limited, with end-user orders persistently weak, downstream purchases dominated by essential restocking, and enterprise sales performing just averagely. Under the combined impact of cost support and weak demand, wait-and-see sentiment in the market intensified further. Most manufacturers maintained stable pricing on shipments and showed little willingness to adjust prices. In the short term, ADC12 prices are expected to continue moving sideways within a narrow range, with the subsequent trend still hinging on changes in scrap cost and the recovery of end-user orders.
[Data Source Statement: Except for publicly available information, all other data are processed by SMM based on public information, market communication, and SMM’s internal database models. They are for reference only and do not constitute any decision-making advice.]
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