8.13 SMM Cast Aluminum Alloy Morning Comment
Futures: The most-traded aluminum alloy 2610 futures contract opened at 23,615 yuan/mt overnight, hit a high of 23,685 yuan/mt and a low of 23,365 yuan/mt, and closed at 23,420 yuan/mt, down 225 yuan/mt, or -0.95%. It formed a long bearish candlestick. After shooting up, it quickly pulled back, encountered clear resistance above, retreated toward the short-term moving average range, and gave back part of the previous gains, forming a bearish pullback candlestick under high-level resistance. Trading volume was 4,526 lots, up 565 lots from the previous trading day. Prices fell on expanding volume as bearish selling was released. Open interest was 19,724 lots, down 128 lots from the previous trading day, a slight pullback in positions.
Spot-Futures Price Spread Daily Report: According to SMM data, on Aug 12 the SMM ADC12 spot price was at a theoretical premium of 685 yuan/mt over the 10:15 closing price of the most-traded cast aluminum alloy contract (AD2610).
Warrant Daily Report: SHFE data showed that on Aug 12 total registered cast aluminum alloy warrants were 17,285 mt, up 693 mt from the previous trading day. Among them, Shanghai had a total registered volume of 1,506 mt, down 0 mt from the previous trading day; Guangdong 1,312 mt, down 0 mt; Jiangsu 4,376 mt, up 570 mt; Zhejiang 7,235 mt, up 153 mt; Chongqing 2,764 mt, down 30 mt; and Sichuan 785 mt, down 0 mt.
Aluminum Scrap: Yesterday, the SMM A00 spot aluminum price closed at 24,370 yuan/mt, up a sharp 270 yuan/mt from the previous trading day. The domestic aluminum scrap market followed the rally overall, with aluminum tense scrap prices generally up 100 yuan/mt, while bare bright aluminum wire, aluminum extrusion scrap free of paint, and other types increased by 200-300 yuan/mt. In terms of the price spread between primary aluminum and scrap, on Aug 12 the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was about 2,360 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap was about 1,260 yuan/mt. As primary aluminum prices continued to climb, aluminum scrap did not have enough momentum to follow, and the spreads widened again. This week, shredded aluminum tense scrap priced based on aluminum content is expected to be dragged down by stagnant raw material prices and weak downstream demand, staying under pressure overall, with the mainstream trading range expected to center around 20,200-20,800 yuan/mt.
Silicon Metal: On Aug 12, SMM prices in east China for non-oxygen blown #553 held steady; oxygen-blown #553 held steady; #521 held steady; #441 held steady; #421 held steady; #421 for silicone use held steady; and #3303 held steady. In Northwest China and Xinjiang, prices of some silicon grades were raised. In South China, Guangdong, Kunming, Huangpu Port, Tianjin, Sichuan, Shanghai, and other regions, silicon prices held steady.
Markets Outside China: On the import side, overseas ADC12 offers are currently stable at $3,090-3,120/mt. As domestic prices rise, the immediate import loss has narrowed to around 961 yuan/mt.
Summary: Yesterday, ADC12 market offers were firm overall, and the SMM average price was raised by 100 yuan/mt. Primary aluminum and aluminum scrap prices continued to rise, further strengthening raw material cost support and boosting market willingness to follow the rally; support beneath prices was relatively solid. However, end-users are still in the high-temperature off-season, with orders and consumption merely ordinary. Downstream purchasing is mainly just-in-time procurement, spot transaction improvement is limited, and the demand side continues to exert some pressure on price gains. In the short term, if futures and aluminum scrap prices remain strong, ADC12 prices still have room to follow the rally further, but weak demand will limit spot gains. Overall, prices are expected to continue the narrow consolidation pattern where cost support and demand constraints coexist.
[Data source statement: All data other than public information 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 decision-making advice.]
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