Tightened tax invoices raise raw material costs, ADC12 price resilience emerges [SMM cast aluminum alloy morning comment]

9.24 SMM Cast Aluminum Alloy Morning Comment

Futures: Overnight, the most-traded AD2611 futures contract closed at 23,680 yuan/mt, with a high of 23,830 yuan/mt and a low of 23,550 yuan/mt, up 0.25%. Trading volume was 3,368, down 824 MoM, with a notable contraction in volume and insufficient buying interest at higher levels. Open interest was 18,487, down 462, continuing to decline. This extends the pattern from the previous round: the rally was accompanied by bears taking profits, with no new bulls actively entering the market; in the current consolidation phase, both bulls and bears are staying on the sidelines.

Spot-Futures Price Spread Daily: According to SMM data, on September 23, the SMM ADC12 spot price carried a theoretical premium of 840 yuan/mt over the closing price of the most-traded cast aluminum alloy futures contract (AD2611) at 10:15 a.m.

Warrant Daily: SHFE data shows that on September 23, total registered warrants for cast aluminum alloy stood at 20,373 mt, down 785 mt from the previous trading day. By region, Shanghai registered 1,477 mt, unchanged from the previous trading day; Guangdong registered 598 mt, down 30 mt; Jiangsu registered 8,059 mt, down 90 mt; Zhejiang registered 8,258 mt, down 635 mt; Chongqing registered 1,832 mt, down 30 mt; Sichuan registered 149 mt, unchanged from the previous trading day.

Aluminum Scrap: Yesterday, SMM A00 aluminum closed at 24,240 yuan/mt, edging down another 30 yuan/mt from the previous trading day. The aluminum scrap market was mostly in a wait-and-see mode with prices holding steady. On the price spread front, as of September 22, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was about 2,512 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap was about 1,291 yuan/mt. The aluminum scrap market is expected to continue consolidating on a strong note. Supply side, the impact of tax audits continues to spread. If scrap yards slow down shipments, circulating supply will tighten again, providing strong support for aluminum scrap prices. Going forward, the focus will remain on the knock-on effects of tax audits across the aluminum scrap industry chain and changes in orders at scrap utilization enterprises.

Silicon Metal: On September 23, SMM east China non-oxygen blown #553 prices were raised by 50 yuan/mt; oxygen-blown #553 prices were raised by 50 yuan/mt; #521 prices were raised by 50 yuan/mt; #441 prices were raised by 50 yuan/mt; #421 prices were unchanged; #421 for silicone use was unchanged; #3303 prices were raised by 50 yuan/mt. Individual silicon prices in south China, Guangdong, Kunming, Huangpu Port, Tianjin, and Shanghai were raised. Silicon prices in northwest China, Xinjiang, and Sichuan were unchanged.

Markets Outside China: On the import side, import ADC12 offers remained at $3,100–3,200/mt, with import spot break-even near the break-even line.

Summary: Yesterday, overall ADC12 market offers held steady, with SMM ADC12 prices unchanged from the previous trading day at 24,500 yuan/mt. Cost side, aluminum scrap raw material prices saw limited fluctuations, but with stricter enforcement of tax invoice policies, compliance procurement requirements for enterprises have risen, keeping raw material procurement costs at relatively high levels. Cost support remains strong, and enterprises have limited willingness to cut prices proactively. Although the pace of demand improvement remains relatively limited, pre-holiday stocking demand and the rebound in futures have provided some support to market sentiment, with some enterprises seeing repaired offers. Overall, industry prices are showing strong resilience under cost support and are expected to continue consolidating on a strong note in the near term. Going forward, close attention should be paid to the progress of tax invoice policy enforcement, changes in aluminum scrap raw material supply, futures price trends, and downstream stocking ahead of the upcoming double holiday.

[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.]