8.17 SMM Cast Aluminum Alloy Morning Comment
Futures: On Friday night last week, the aluminum alloy 2610 contract opened at 23,170 yuan/mt. After a brief dip in early night trading, bearish momentum weakened, and prices consolidated and rebounded to repair losses. It held up well into the close, closing at 23,245 yuan/mt, up 0.48%. After a sharp drop on the 4-hour chart, a bullish candlestick formed to repair losses. The earlier rapid sell-off pace eased temporarily, near-term support emerged below, and the market shifted from a fast decline to a slightly rebounding repair pattern.
Spot-Futures Price Spread Daily: According to SMM data, on August 14, the theoretical premium of the SMM ADC12 spot price over the closing price at 10:15 of the most-traded cast aluminum alloy futures contract (AD2610) was 865 yuan/mt.
Warrant Daily: SHFE data showed that on August 14, the total registered volume of cast aluminum alloy warrants was 18,311 mt, an increase of 333 mt from the previous trading day.
Aluminum scrap: On Friday last week, SMM A00 spot aluminum prices closed at 23,870 yuan/mt, extending the decline by 250 yuan/mt from the previous trading day. China’s aluminum scrap market generally followed, down 200 yuan/mt. For the price difference between A00 aluminum and aluminum scrap, on August 14, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was about 2,250 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap was about 1,150 yuan/mt, widening again WoW, with the economic advantage of aluminum scrap versus primary aluminum recovering somewhat. In the short term, the aluminum scrap market is expected to continue moving sideways at high levels, while weak end-use demand remains the key factor weighing on prices.
Silicon metal: Last week, spot silicon metal rebounded slightly and then stayed stable, while the price center of futures moved higher WoW. SMM oxygen-blown #553 silicon in east China was 9,100-9,200 yuan/mt, up 100 yuan/mt WoW, and 441# silicon was 9,200-9,400 yuan/mt, up 50 yuan/mt WoW. In terms of market quotes and transactions, silicon enterprises kept quotes firm. Together with the futures rally, low-priced supply quotes decreased. After prices rose, downstream purchasing sentiment was not active, mainly digesting orders purchased earlier at low prices or making just-in-time procurement.
Markets outside China: Current overseas ADC12 quotes were at $3,080-3,200/mt, and the immediate import loss widened slightly to around 1,200 yuan/mt.
Summary: On Friday last week, overall ADC12 market quotes were lowered by 200 yuan/mt. The price cut was mainly driven by factors including the pullback in aluminum prices, aluminum scrap prices following lower and dragging costs down, and weaker cast aluminum alloy futures, with cost support weakening somewhat. Meanwhile, it remains the high-temperature off-season, and some downstream players have not fully resumed operations; orders and purchasing demand were weak, the spot market lacked sufficient support, and enterprises had limited willingness to hold prices firm. Under the combined impact of lower costs and weak demand, ADC12 prices generally weakened in tandem with the market. In the short term, ADC12 prices are expected to continue to move sideways within a range. On the one hand, elevated compliant raw material prices, China’s operating rate at a low level for the same period, and the closure of the import window will continue to provide cost- and supply-side support for prices, limiting downside room; on the other hand, end-use demand remains weak amid the high-temperature off-season, social inventory has resumed an inventory buildup, and the spot market lacks demand-driven momentum for a sustained rise. Therefore, a short-term price rise will still need to wait for a substantive improvement in end-use consumption.
[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 and do not constitute decision-making advice.]
![Macro Support Combined With Inventory Destocking, Aluminum Prices Drift Higher [SMM Aluminum Morning Meeting Minutes]](https://imgqn.smm.cn/usercenter/kVTpA20251217171654.jpg)
