9.4 SMM cast aluminum alloy morning comment
Futures: Overnight, the most-traded cast aluminum alloy 2611 contract opened at 23,775 yuan/mt, shot up to 23,800 yuan before consolidating and pulling back, dipped to a low of 23,600 yuan, recovered slightly near the close, and closed at 23,610 yuan/mt, up 20 yuan from the previous settlement price of 23,590 yuan, a gain of 0.08%. Night session trading volume reached 4,422 lots, and open interest increased by 857 lots to 17,154 lots, driven mainly by new long positions. However, the closing price of 23,610 yuan was below the average price line of 23,688 yuan, indicating that selling pressure at highs prevailed, bulls failed to hold onto opening gains, and bears held a slight upper hand in the short term.
Spot-futures price spread daily: According to SMM data, on September 3, the theoretical premium of SMM ADC12 spot price over the 10:15 closing price of the most-traded cast aluminum alloy futures contract (AD2611) was 640 yuan/mt.
Warrant daily: SHFE data showed that on September 3, total registered warrants for cast aluminum alloy stood at 21,923 mt, up 364 mt from the previous trading day.
Social inventory: This week, China's social inventory of cast aluminum alloy ingots recorded 33,000 mt, up 1,200 mt WoW, marking the fourth consecutive week of inventory buildup. By region, Zhejiang saw the most significant buildup, rising 2,100 mt in a single week to 14,100 mt; Guangdong increased 1,100 mt to 6,600 mt, with these two regions being the main sources of this week's inventory growth; Jiangsu destocked by 1,300 mt to 7,100 mt; Chongqing and Sichuan fell by 300 mt and 400 mt respectively; Shanghai and Henan were flat WoW. On a YoY basis, current inventory was down 38,400 mt from the same period last year, a decline of 53.8%.
Aluminum scrap: On Thursday, SMM A00 aluminum price closed at 24,350 yuan/mt, up 270 yuan/mt WoW from the previous trading day, and aluminum scrap market prices followed the rally across the board. In terms of price spreads, on September 3, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was approximately 2,461 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap was approximately 1,240 yuan/mt, widening further WoW. A substantive recovery in end-use demand still needs to be observed, destocking of wrought aluminum alloy scrap inventory still requires time, and scrap utilization enterprises are likely to continue purchasing as needed and maintain low-inventory operating strategies, with the pace of price follow-through expected to remain slow. Next week, the aluminum scrap market is expected to consolidate on a strong note with the price center edging slightly higher. The mainstream operating range for shredded aluminum tense scrap (priced based on aluminum content) is expected to center around 20,300-21,000 yuan/mt, with close attention needed on the pace of downstream order recovery.
Silicon metal: This week, spot silicon metal prices consolidated on a strong note. As of September 3, SMM oxygen-blown #553 silicon in east China was at 9,400-9,500 yuan/mt, up 50 yuan/mt WoW, and #441 silicon was at 9,500-9,700 yuan/mt, up 50 yuan/mt WoW. After production cuts at large plants in Xinjiang were implemented, silicon enterprises showed increased willingness to hold prices firm, low-priced cargoes in the market decreased, silicon enterprises quoted firmly, and some suppliers raised quotes slightly. Affected by long position profit-taking and macro sentiment, silicon metal futures prices pulled back on a weak note, wait-and-see sentiment in the market intensified, transactions remained need-based, and the price center consolidated at highs.
Markets outside China: Current overseas ADC12 offers remained stable at $3,050-3,180/mt. As domestic prices strengthened slightly, import losses continued to narrow to around 600 yuan/mt.
Summary: This week, ADC12 market prices rose for consecutive sessions. As of Thursday, prices had accumulated a weekly gain of 350 yuan/mt to 24,300 yuan/mt. In the short term, ADC12 prices are expected to consolidate on a strong note, with further upside room for the price center. Strong aluminum prices on the cost side, aluminum scrap prices fluctuating at highs, and the closed import window will continue to provide support. If peak-season demand in September is further released and drives end-user restocking, prices still have upside room. However, with social inventory continuing to build up, operating rates rebounding, and demand yet to show significant volume growth, the sustainability of the price increase remains to be seen. Going forward, close attention should be paid to the extent to which peak-season demand materializes and supply-side changes in raw materials.
[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.]
![[Aluminum futures extend rebound with center moving higher; spot aluminum remains stable across the board; supply growth continues to weigh on prices - SMM Alumina Morning Comment]](https://imgqn.smm.cn/usercenter/kxYyQ20251217171651.jpg)
![Insufficient peak-season demand realization, accelerated destocking provides upward price momentum [SMM Aluminum Morning Meeting Summary]](https://imgqn.smm.cn/usercenter/RLjGN20251217171652.jpg)
