Cast aluminum futures decline with increased positions, spot cargo continues steady adjustment [SMM cast aluminum alloy morning comment]

10.15 SMM cast aluminum alloy morning comment

Futures: Overnight, the most-traded aluminum alloy 2612 contract opened at 22,890 yuan/mt, drifted lower after the open, dipped to an intraday low of 22,660 yuan/mt, and closed at 22,725 yuan/mt, down 195 yuan/mt or 0.85%, with a trading range of 22,660-22,890 yuan/mt. Trading volume was 6,565 lots, and open interest increased by 237 lots. The decline came with rising open interest, and the daily candlestick closed bearish. The DKX indicator's B line was below the D line, and the KD indicator's K line was below the D line, suggesting a weak short-term trend.

Basis daily: According to SMM data, on October 14, 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 1,495 yuan/mt.

Warrant daily: SHFE data showed that on October 14, total registered cast aluminum alloy warrants stood at 14,423 mt, down 1,815 mt from the previous trading day.

Aluminum scrap: On Wednesday, SMM A00 aluminum price closed at 23,620 yuan/mt, down 90 yuan/mt WoW from the previous trading day. Wait-and-see sentiment spread on the buying side, and aluminum scrap quotes in multiple regions such as Foshan, Hunan, Hubei, and Anhui were left unchanged. On price spreads, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was about 2,323 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap was about 990 yuan/mt. By mid-October, the aluminum scrap market continued to hold up well. Supply side, scrap yards have all briefly resumed operations, and material release has increased somewhat, but recycling policy constraints on liquidity remain. Invoice quota restrictions are widespread, and the tight invoice supply situation is unlikely to ease in the short term. Tight supply will continue to support prices. Demand side, as the traditional peak season for cast aluminum alloy consumption gradually kicks in, enterprises are accelerating 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 inspection restrictions reducing expected aluminum scrap supply, the upward price channel is also expected to gradually open.

Silicon metal: On October 14, SMM prices in east China for non-oxygen blown #553 rose by 50 yuan/mt; oxygen-blown #553 rose by 50 yuan/mt; #521 rose by 50 yuan/mt; #441 rose by 50 yuan/mt; #421 rose by 50 yuan/mt; #421 for silicone use rose by 50 yuan/mt; #3303 held steady.

Markets outside China: On imports, overseas ADC12 quotes held steady in the $3,060-3,160/mt range. As domestic prices rose, import real-time profit/loss rebounded into positive territory. Attention should be paid to the replenishment of imported material going forward.

Summary: On Wednesday, the ADC12 market was largely stable overall, with strong short-term wait-and-see sentiment. SMM ADC12 price was flat from the previous day at 24,500 yuan/mt. Currently, aluminum scrap raw material costs provide strong support, and enterprises still have a strong willingness to hold prices firm, limiting the downside for spot prices. Overall, ADC12 prices are expected to remain in a stable-to-adjusting trend in the short term. Future movement still depends on aluminum price fluctuations, aluminum scrap cost changes, and end-use demand performance.

[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 investment advice.]