Cast Aluminum Alloy Fell 0.62% in the Night Session; Warrants Increased by 1,444 mt MoM [SMM Cast Aluminum Alloy Morning Comment]

8.18 SMM Cast Aluminum Alloy Morning Comment

Futures: Overnight, the aluminum alloy 2610 contract opened at 23,230 yuan/mt, with a high of 23,245 yuan/mt and a low of 23,030 yuan/mt, and closed at 23,085 yuan/mt, down 145 yuan/mt, a decline of 0.62%. After the night session opened, bulls exited quickly, and prices plunged in a straight line to a new stage low, then moved sideways in a narrow range around the low-level average price line until the close; trading volume for the period was 6,711 lots, up 489 lots MoM, and open interest was 18,725 lots, with a slight increase of 323 lots.

Spot-Futures Price Spread Daily: According to SMM data, on August 17, the theoretical premium of the SMM ADC12 spot price over the 10:15 closing price of the most-traded cast aluminum alloy contract (AD2610) was 775 yuan/mt.

Warrant Daily: SHFE data showed that on August 17, the total registered volume of cast aluminum alloy warrants was 19,725 mt, an increase of 1,444 mt from the previous trading day.

Aluminum scrap: On Monday, the SMM A00 spot aluminum price closed at 24,070 yuan/mt, up another 200 yuan/mt from the previous trading day, and prices in China’s aluminum scrap market rose accordingly. Against the backdrop of continuously rising primary aluminum prices, aluminum scrap saw relatively limited fluctuations, and the price pass-through mechanism was impeded, mainly constrained by two factors: first, downstream demand for secondary aluminum alloy weakened marginally; with high-temperature holidays overlapping the traditional consumption off-season, operating rates at cast aluminum alloy enterprises continued to decline and order volumes shrank; second, inventories of wrought aluminum alloy scrap raw materials such as doors and windows in Henan and other regions remained high, weakening the elasticity of aluminum scrap price increases. It is expected that in the short term, the aluminum scrap market will maintain a pattern of high-level, narrow-range fluctuations, with weak end-use demand still the core factor suppressing prices.

Silicon metal: On August 17, SMM east China non-oxygen blown #553 prices were raised by 50 yuan/mt; oxygen-blown #553 prices were raised by 100 yuan/mt; 521# prices were raised by 100 yuan/mt; 441# prices were raised by 100 yuan/mt; 421# prices were raised by 100 yuan/mt; 421# (for silicone) prices were raised by 50 yuan/mt; and 3303# prices were raised by 50 yuan/mt.

Markets outside China: Current ex-China ADC12 quotes were at $3,080–$3,200/mt, with the immediate import loss at around 1,200 yuan/mt.

Summary: On Monday, ADC12 market quotes were generally firm, with most enterprises raising prices by 100 yuan/mt, mainly supported by the rebound in futures and elevated raw material costs; some enterprises also sought to recoup earlier declines. However, end-use demand remains in the off-season, with procurement mainly driven by rigid demand; upward momentum on the spot side is relatively limited, and the overall market still shows a pattern of strong cost support and demand limiting upside room. ADC12 prices are expected to continue moving sideways within a range in the short term. On the one hand, persistently high 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, limiting downside room; on the other hand, end-use demand is weak during the high-temperature off-season, and social inventory has resumed inventory buildup, leaving the spot market without sustained demand-driven support for further gains. Therefore, a short-term rise in prices will still need to wait for a substantive improvement in end-use consumption.

[Data Source Statement: Other data besides public information are processed by SMM based on public information, market communication, and SMM’s internal database models, for reference only and not constituting decision-making advice.]