Cost support drives ADC12 aluminum alloy prices up; peak season demand recovery remains limited [SMM cast aluminum alloy morning comment]

9.9 SMM Cast Aluminum Alloy Morning Comment

Futures: Overnight, the most-traded AD2611 contract opened at 23,655 yuan/mt, hit a high of 23,875 yuan/mt and a low of 23,630 yuan/mt, and closed at 23,810 yuan/mt, up 145 or 0.61%. Trading volume was 6,216, up 2,810 WoW, a notable expansion; open interest was 18,805, up 381 WoW, continuing to build positions.

Basis Daily: According to SMM data, on September 8, the theoretical premium of SMM ADC12 spot price over the closing price of the most-traded cast aluminum alloy contract (AD2611) at 10:15 was 705 yuan/mt.

Warrant Daily: SHFE data showed that on September 8, total registered warrants for cast aluminum alloy stood at 23,133 mt, up 244 mt from the previous trading day. By region, Shanghai registered 1,625 mt, unchanged from the previous trading day; Guangdong registered 1,580 mt, down 59 mt; Jiangsu registered 7,149 mt, unchanged; Zhejiang registered 10,255 mt, up 303 mt; Chongqing registered 2,165 mt, unchanged; Sichuan registered 359 mt, unchanged.

Aluminum Scrap: Yesterday, SMM A00 aluminum price closed at 24,460 yuan/mt, up another 50 yuan/mt from the previous trading day. Scrap aluminum market prices were broadly stable with slight gains. On the price spread front, on September 8, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was about 2,541 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap was about 1,320 yuan/mt, widening further WoW. A substantive recovery in end-use demand still needs to be confirmed, and the digestion of wrought aluminum alloy scrap inventories still takes time. Scrap utilization enterprises are likely to continue purchasing as needed and maintain low-inventory operating strategies, with the pace of price following likely to remain slow. This week, the aluminum scrap market is expected to consolidate on a strong note with a slight upward shift in the price center, with close attention needed on the pace of downstream order recovery.

Silicon Metal: Yesterday, SMM oxygen-blown #553 silicon in east China was around 9,400-9,500 yuan/mt, and #441 silicon was around 9,500-9,700 yuan/mt. On the supply side, silicon enterprises maintained firm quotes, futures prices consolidated at highs, and in some parts of northwest China, spot-futures basis quotes from traders narrowed slightly stronger than before. Low-priced cargoes were scarce in the market, and downstream buyers remained cautious, mainly purchasing on dips or making just-in-time procurement.

Markets Outside China: On the import side, overseas ADC12 offers rebounded slightly to $3,050-3,200/mt. As domestic prices strengthened, immediate import losses continued to narrow to within 400 yuan/mt.

Summary: Yesterday, ADC12 market quotes were broadly stable on a strong note, with SMM ADC12 price up 50 yuan/mt from the previous day to 24,350 yuan/mt. Driven by higher aluminum prices and rising raw material costs, some enterprises raised quotes by 100 yuan/mt; however, given that the recovery in end-use demand remains insufficient, some enterprises chose to hold quotes steady and wait on the sidelines, with overall market pricing remaining cautious. As the traditional peak season gradually progresses, some downstream orders have improved from earlier levels, and initial signs of marginal demand recovery have emerged, though the overall extent of the recovery remains limited. In the short term, ADC12 prices are likely to continue consolidating on a strong note, with the upside still dependent on the sustained realization of peak-season demand and the durability of cost support.

[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, not constituting decision-making advice.]