10.14 SMM cast aluminum alloy morning comment
Futures: Overnight, the most-traded aluminum alloy 2612 contract opened at 23,050 yuan/mt, shot up to an intraday high of 23,130 yuan/mt, then dipped to a low of 22,960 yuan/mt, and closed at 23,070 yuan/mt, up 100 yuan/mt or 0.44%, with a trading range of 22,960-23,130 yuan/mt. Trading volume was 7,070 lots, down 6,982 lots from the previous trading day, while open interest increased by 1,023 lots, showing a pattern of rising positions and rebounding prices. The DKX indicator's B line is below the D line, and the KD indicator's K value is below the D value, indicating the market remains in a weak recovery phase in the short term.
Basis daily: According to SMM data, on October 13, the theoretical premium of SMM ADC12 spot price over the closing price of the most-traded cast aluminum alloy contract (AD2612) at 10:15 widened to 1,475 yuan/mt.
Warrant daily: SHFE data showed that on October 13, total registered warrants for cast aluminum alloy stood at 16,238 mt, down 1,165 mt from the previous trading day.
Aluminum scrap: On Tuesday, SMM A00 aluminum price closed at 23,710 yuan/mt, down 100 yuan/mt MoM from the previous trading day. Price performance diverged across aluminum scrap categories, with baled UBC down 50 yuan/mt today and aluminum tense scrap prices down 100 yuan/mt. In terms of price spreads, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was about 2,433 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap was about 1,101 yuan/mt. Supply side, aluminum scrap yards have all resumed operations after the holiday, and scrap release has increased somewhat, but recycling policies continue to constrain liquidity. Invoice quota restrictions remain widespread, and the tight invoice supply situation is unlikely to change in the short term, with tight supply continuing to support prices. Demand side, as the traditional peak consumption season for cast aluminum alloy gradually kicks off, enterprises are accelerating their order-taking and procurement pace. Under the dual-tight supply-demand situation, price support for aluminum tense scrap is expected to strengthen further. Demand for wrought aluminum alloy is moderate, and in-factory inventory is relatively ample, but with tax audit restrictions expected to reduce aluminum scrap supply, the upward price channel will gradually open up.
Silicon metal: On October 13, SMM non-oxygen blown #553 price in east China remained stable; oxygen-blown #553 price remained stable; #521 price rose 50 yuan/mt; #441 price rose 50 yuan/mt; #421 price rose 50 yuan/mt; #421 for silicone use remained stable; #3303 price remained stable.
Markets outside China: On the import side, overseas ADC12 offers remained stable in the range of $3,060-3,160/mt. As domestic prices moved higher, import spot profitability rebounded to positive territory, and attention should be paid to the replenishment of imported supply going forward.
Summary: On Tuesday, the ADC12 market was largely stable and wait-and-see, with prices showing some resilience. Cost side, aluminum scrap raw material prices remained relatively firm, and tax invoice issues continued to affect compliant raw material supply. Enterprise production costs and procurement pressure persisted, providing strong support for ADC12 prices and limiting the downside for spot prices. However, demand-side improvement was limited, with the traditional September-October peak season underperforming expectations. Downstream procurement enthusiasm was insufficient, and upward momentum for prices was also weak. In the short term, prices are expected to continue consolidating, with attention needed on aluminum price trends, changes in compliant raw material supply, and improvements in downstream orders.
[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.]
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