The night session retreated after a rapid rise and closed lower; aluminum scrap prices remain firm, but downstream high-temperature holidays drag down orders [SMM cast aluminum alloy morning comment]

8.5 SMM Cast Aluminum Alloy Morning Comment

Futures: Overnight, Aluminum alloy 2610 opened at 23,480 yuan/mt, shot up to a session high of 23,490 yuan/mt before pulling back under pressure, dropped to a low of 23,355 yuan/mt, and closed at 23,385 yuan/mt, down by a slight 50 yuan from the settlement price, a decline of 0.21%. Open interest increased by 475 lots MoM, and trading volume shrank to 2,684 lots from the previous period. The 4-hour candlestick closed as a bearish candlestick at highs, with technical pullback occurring after a previous rally. The KD indicator retreated from highs. Resistance near 23,490 yuan/mt was highlighted in the short term, support formed near 23,355 yuan/mt, and it is likely to maintain a high-level consolidation pattern subsequently.

Basis Daily: According to SMM data, on August 4, the SMM ADC12 spot price against the closing price of the most-traded cast aluminum alloy contract (AD2610) at 10:15 am, the theoretical premium was .

Warrant Daily: SHFE data shows that on August 4, total registered warrants for cast aluminum alloy were 17,433 mt, down 120 mt from the previous trading day.

Aluminum Scrap: Yesterday, SMM A00 spot aluminum price closed at 23,730 yuan/mt, up 230 yuan/mt from the previous trading day. Aluminum scrap prices across regions generally followed the rise, with some regions and types adopting a wait-and-see stance. In terms of price difference between A00 aluminum and aluminum scrap, on August 4, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was about 2,160 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap was about 950 yuan/mt. Against the backdrop of the off-season, aluminum scrap suppliers were generally not very willing to sell at low prices, and aluminum scrap prices overall remained firm. Demand side, with the arrival of high-temperature holidays, operating rates of downstream cast aluminum alloy enterprises declined, and orders shrank. Operating rates at secondary aluminum plate/sheet and strip enterprises were moderate, but overall raw material demand saw a notable decline in support compared to Q2.

Silicon Metal: Yesterday, SMM oxygen-blown #553 silicon in east China was around 9,000-9,100 yuan/mt, and #441 silicon was around 9,200-9,300 yuan/mt. The most-traded futures contract was disturbed by production cut news on the supply side and bullish sentiment on PV anti-involution. The most-traded silicon metal futures contract trended stronger, with silicon enterprises quoting mostly stable prices and showing strong willingness to sell. Attention is on the impact of variables on short-term price spikes, with resistance above focused on silicon enterprises' selling interest.

Markets Outside China: Currently, offers for ADC12 outside China edged up to $3,050-3,190/mt, with the price increase slightly higher than in China, leading to a slight widening of import instant losses to around 853 yuan/mt.

Summary: On Tuesday, SMM ADC12 price rebounded by 100 yuan/mt, driven primarily by an aluminum price rebound and stronger cost support. However, improvement in market demand remained not pronounced, as some downstream enterprises gradually started high-temperature holidays, orders were weak, and purchases remained mainly on a need-to basis. Therefore, although the current ADC12 price has rebounded under cost support, weak demand still constrains the upside room for prices, and the market will continue to consolidate in the short term with coexisting cost support and weak demand.

[Data Source Statement: All data other than public information are based on public information, market communication, and SMM's internal database model, processed by SMM, for reference only, and do not constitute decision-making advice.]