[Aluminum futures under pressure, aluminum scrap remains stable and strong - SMM cast aluminum alloy morning comment]

9.11 SMM cast aluminum alloy morning comment

Futures: Overnight, the most-traded AD2611 contract opened at 23,570 yuan/mt, hit a high of 23,570 yuan/mt and a low of 23,160 yuan/mt, and closed at 23,365 yuan/mt, down 355, or 1.5%. Trading volume was 6,803, a significant MoM increase; open interest was 19,227, up 295 MoM, continuing to build positions. Volume and open interest both rose as prices fell. The notable expansion in trading volume alongside rising open interest suggests bears actively added positions to pressure prices, with capital divergence shifting toward the bearish side and selling pressure confirmed.

Basis daily: According to SMM data, on September 10, 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 580 yuan/mt.

Warrant daily: SHFE data showed that on September 10, total registered warrants for cast aluminum alloy stood at 23,103 mt, down 30 mt from the previous trading day. By region, Shanghai registered 1,625 mt, unchanged from the previous trading day; Guangdong registered 1,491 mt, down 30 mt; Jiangsu registered 7,149 mt, unchanged; Zhejiang registered 10,225 mt, unchanged; Chongqing registered 2,165 mt, unchanged; Sichuan registered 359 mt, unchanged.

Aluminum scrap: Yesterday, SMM A00 aluminum price closed at 24,560 yuan/mt, flat MoM from the previous trading day, and aluminum scrap market prices were also stable. On the price spread front, on September 10, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was about 2,436 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap was about 1,415 yuan/mt, widening slightly again WoW. The aluminum scrap market is expected to consolidate on a strong note next week. The mainstream trading range for shredded aluminum tense scrap (priced based on aluminum content) is expected to center around 20,700-21,300 yuan/mt, with close attention needed on the pace of downstream order recovery and the sustainability of scrap yard selling activity.

Silicon metal: Yesterday, SMM oxygen-blown #553 silicon in east China was at 9,400-9,600 yuan/mt. This week, silicon metal trading remained in a stalemate with stagnant prices. In September, supply-side production cuts for silicon metal increased, and fundamentals did improve; meanwhile, raw material prices such as silicon coal rose, further strengthening cost support for silicon metal production and leaving limited room on the downside. From a historical price perspective, although spot prices rose by only a few hundred yuan, this year's spot price fluctuations have been very small, and current spot prices are already at the high end of this year's range. Coupled with no growth in end-use demand, downstream acceptance of high spot prices is lukewarm, and prices also face some resistance on the upside. In the short term, silicon metal prices are expected to remain in a stalemate and move sideways.

Markets outside China: On the import side, overseas ADC12 offers edged up to $3,080-3,220/mt, and immediate import losses widened again to around 400 yuan/mt.

Summary: Yesterday, ADC12 market prices were mostly stable with slight upward adjustments in some regions. Cost side, recent aluminum prices held up well, and with copper prices rising, alloy production costs increased somewhat, providing some support to prices. Demand side, although the market has entered the traditional September peak season and some enterprises reported that orders have recovered compared with earlier, the overall improvement remains limited, and the peak season effect has yet to fully materialize, with downstream procurement still largely need-based. Under the combined influence of cost support and limited demand improvement, the industry as a whole remains cautious about price adjustments. In the short term, ADC12 prices are likely to consolidate on a strong note, and further price rises still require observation of the actual 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.]