Aluminum alloy night session closed higher with increased open interest; watch the pace of end-use demand release [SMM cast aluminum alloy morning comment]

9.3 SMM cast aluminum alloy morning comment

Futures: Overnight, the most-traded cast aluminum alloy 2611 contract opened at 23,375 yuan/mt, shot up to 23,630 yuan before pulling back to hit bottom at 23,330 yuan, then stabilized and rebounded in late trading to close at 23,595 yuan. It rose 190 yuan from yesterday's settlement price of 23,405 yuan/mt, up 0.81%. Night session volume was 3,946 lots, and open interest increased by 807 lots to 15,383 lots, with gains on rising open interest as bulls actively entered. The closing price stood above the average price line of 23,497 yuan, with bulls in control; late-session consolidation at highs suggested caution in chasing further gains.

Spot-futures price spread daily: According to SMM data, on September 2, the theoretical premium of SMM ADC12 spot price over the 10:15 closing price of the most-traded cast aluminum alloy contract (AD2611) was 705 yuan/mt.

Warrant daily: SHFE data showed that on September 2, total registered cast aluminum alloy warrants stood at 21,559 mt, down 30 mt from the previous trading day.

Aluminum scrap: On Wednesday, SMM A00 spot aluminum closed at 24,080 yuan/mt, edging down 30 yuan/mt WoW from the previous trading day, while domestic aluminum scrap market prices remained broadly stable. On the price difference front, on September 2, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was about 2,322 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap was about 1,157 yuan/mt, holding steady WoW.

Silicon metal: (1) Prices: Yesterday, SMM oxygen-blown #553 silicon in east China was around 9,500 yuan/mt, and #441 silicon was around 9,500-9,700 yuan/mt. (2) Production: SMM data showed China's silicon metal production in August was 356,300 mt, down 8.2% MoM and down 7.6% YoY. In early September, affected by production cuts at large plants in Xinjiang, September silicon metal production is expected to continue its downtrend.

Markets outside China: Current overseas ADC12 offers remained stable at $3,050-3,180/mt. As domestic prices firmed slightly, import losses narrowed further to around 600 yuan/mt.

Summary: On Wednesday, ADC12 market quotes remained broadly stable. On one hand, aluminum prices and futures are running relatively steady, with no notable changes on the cost side, providing little additional impetus for spot prices. On the other hand, while end-use demand has improved slightly from earlier, the peak season has yet to clearly kick in, and the sustainability of the improvement in market purchasing remains to be seen. Against this backdrop, most enterprises are holding prices steady and waiting on the sidelines, with some taking a cautiously optimistic view of the market outlook, but no widespread price hikes have materialized. In the short term, prices are expected to consolidate on a strong note, with focus on subsequent aluminum price trends and the release of end-use demand.

[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, and are for reference only and do not constitute decision-making advice.]