4.27 SMM Cast Aluminum Alloy Morning Comment
Futures: Last Friday night, the aluminum alloy 2606 contract moved downwards after a higher opening, opening at 23,415 yuan/mt, rising to a high of 23,485 yuan/mt before pulling back in a fluctuating trend, dipping to 23,380 yuan/mt at the close and settling at that price, down 15 yuan/mt from the previous close, a slight decline of 0.06%. Trading volume was 2,131 lots and open interest was 14,880 lots, both pulling back from previous levels, indicating weak willingness for capital participation. The intraday trend showed a pattern of fluctuating downward after hitting highs, with the closing price falling below the average price line. Short-term bullish momentum was insufficient, and prices were in the doldrums.
Spot-futures price spread daily report: According to SMM data, on April 24, the SMM ADC12 spot price had a theoretical premium of 625 yuan/mt over the most-traded cast aluminum alloy contract (AD2606) closing price at 10:15 AM.
Warrant daily report: SHFE data showed that on April 24, total registered warrants for cast aluminum alloy stood at 30,312 mt, down 122 mt from the previous trading day. Among them, Shanghai had a total registered volume of 1,822 mt, unchanged from the previous trading day; Guangdong had a total registered volume of 11,029 mt, down 61 mt from the previous trading day; Jiangsu had a total registered volume of 3,721 mt, down 61 mt from the previous trading day; Zhejiang had a total registered volume of 8,691 mt, unchanged from the previous trading day; Chongqing had a total registered volume of 3,543 mt, unchanged from the previous trading day; Sichuan had a total registered volume of 1,506 mt, unchanged from the previous trading day.
Aluminum scrap: Last Friday, spot primary aluminum prices fell 30 yuan/mt from the previous trading day, while aluminum scrap market prices remained generally stable. Price difference between A00 aluminum and aluminum scrap: on April 24, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was recorded at 2,815 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap was 1,955 yuan/mt. Supply side, tightening supervision on reverse invoicing and the cancellation of tax rebates led to tight supply of compliant invoiced goods. Import side, March aluminum scrap imports reached 197,300 mt, up 44.75% MoM significantly, but import traders became increasingly cautious in their purchasing sentiment due to continuously rising LME prices, and subsequent imports are expected to pull back. Demand side, the "Golden March, Silver April" peak season saw divergent production starts. The aluminum tense scrap segment purchased as needed with low inventory operations, transactions were dominated by rigid demand, and wait-and-see sentiment was strong. The wrought aluminum alloy scrap segment had some support from peak season stockpiling but with limited intensity. Overall, supply-side policy constraints are unlikely to ease in the short term, tight compliant supply combined with scrap yards holding back from selling provided support, and the increasing probability of a pullback in subsequent imports will further aggravate the tight supply situation. Demand side, the divergence between aluminum tense scrap and wrought aluminum alloy scrap downstream remained unchanged, and aluminum price fluctuations and lack of orders continued to suppress purchase willingness. In the short term, the uncertain outlook for US-Iran conflicts, tight compliant supply, and expected pullback in imported aluminum scrap volumes will support aluminum scrap prices to hold up well.
Silicon metal: On April 24, SMM east China non-oxygen blown #553 was stable from the previous day; oxygen-blown #553 was stable from the previous day; #521 was stable from the previous day; #441 was stable from the previous day; #421 was stable from the previous day; #421 for silicone use was stable from the previous day; #3303 was stable from the previous day. Individual silicon prices in north-west China were adjusted downward. Silicon prices in Huangpu Port, Tianjin, Xinjiang, Sichuan, Kunming, and Shanghai remained partially stable.
Markets outside China: Currently, ex-China ADC12 was quoted at $3,320-3,380/mt, with instant import losses continuing to remain above 2,000 yuan.
Summary: Last Friday, the ADC12 market overall was in the doldrums. As aluminum prices weakened, cost support loosened somewhat, and some enterprises actively lowered their quotes. Meanwhile, downstream demand remained sluggish, pre-holiday stockpiling fell short of expectations, and transactions were sluggish, further suppressing upward momentum. Combined with increasing low-priced supply in the market and intensifying competition among enterprises, the price center shifted slightly downward. In the short term, under the dual impact of weakening cost support and insufficient demand, ADC12 prices are expected to continue a fluctuating trend in the doldrums.
[Data source disclaimer: Data other than public information is derived from public information, market communication, and SMM's internal database models, processed by SMM for reference only and does not constitute decision-making advice.]
