Ex-China prices decline, import losses persist [SMM cast aluminum alloy morning comment]

9.16 SMM cast aluminum alloy morning comment

Futures: Overnight, the most-traded AD2611 cast aluminum alloy contract opened at 23,335 yuan/mt, shot up to 23,385 yuan/mt after the open before bull momentum faded, with prices pulling back step by step. The contract dipped to a low of 23,210 yuan/mt during the session, then consolidated to recover in late trading and closed at 23,275 yuan/mt, down 15 yuan/mt or 0.06% from yesterday's settlement price of 23,290 yuan/mt.

Spot-futures price spread daily: According to SMM data, on September 15, the theoretical premium of SMM ADC12 spot price over the closing price of the most-traded cast aluminum alloy contract (AD2611) at 10:15 am was 875 yuan/mt.

Warrant daily: SHFE data showed that on September 15, total registered warrants for cast aluminum alloy stood at 24,252 mt, up 718 mt from the previous trading day.

Industry news: According to data from the China Chamber of Commerce for Motorcycles, in August, motorcycle production and sales were 2.1385 million units and 2.1039 million units respectively, down 5.78% and 5.27% MoM, and up 12.94% and 13% YoY. From January to August, cumulative motorcycle production and sales were 16.4935 million units and 16.3937 million units, up 13.72% and 13.23% YoY respectively. In August, motorcycle exports were 1.3372 million units, down 5.81% MoM and up 18.97% YoY; from January to August, complete vehicle exports totaled 10.2941 million units, up 17.77% YoY, while motorcycle engine exports were 694,000 units, down 19.14% YoY.

Aluminum scrap: On Tuesday, SMM A00 aluminum price closed at 24,140 yuan/mt, up 60 yuan/mt from the previous trading day, with the aluminum scrap market overall remaining stable. In terms of price spreads, on September 15, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was about 2,509 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap was about 1,288 yuan/mt. Supply side, the tight raw material supply pattern remained unchanged, with compliant invoiced aluminum scrap becoming increasingly scarce, constraining operating rates and purchases at scrap utilization enterprises. Against this backdrop, some aluminum scrap yards actively sold cargoes amid high aluminum prices while reducing purchases and stockpiling, leading to a phased release of market supply.

Silicon metal: Yesterday, SMM oxygen-blown #553 silicon in east China was around 9,400 yuan/mt, and #441 silicon was around 9,500 yuan/mt. Silicon metal prices have been trending weak recently, mainly affected by expectations for Q4 polysilicon production cuts. As one of the major downstream consumers of silicon metal, polysilicon's operating rate directly affects silicon metal demand changes. This has had a strong impact on market sentiment, and with no new bullish news recently, prices are expected to consolidate on a subdued note in the near term.

Markets outside China: Current overseas ADC12 offers pulled back slightly to $3,080-3,180/mt, with import losses at around 400 yuan/mt.

Summary: On Tuesday, the ADC12 market overall maintained stable prices, with SMM ADC12 price holding steady at 24,200 yuan/mt from the previous trading day. Cost side, raw material prices such as aluminum scrap showed limited fluctuations overall, with cost support showing no significant changes yet. Demand side, purchases remained primarily rigid, with peak-season demand improvement yet to form significant growth. With costs and supply-demand lacking further drivers, enterprises generally showed weak willingness to adjust prices in the short term, with the market dominated by a wait-and-see approach and stable pricing.

[Data source statement: Except for public 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.]