5.13 SMM Cast Aluminum Alloy Morning Comment
Futures: During the night session, aluminum alloy 2607 exhibited an overall trend of "retreat after rapid rise, hovering at lows." From the intraday perspective, prices first dipped quickly to around 23,180 after the opening, then rebounded as capital flowed in, briefly surging to around 23,340-23,350, with short-term sentiment somewhat recovering. However, selling pressure above remained evident, and prices gradually pulled back after hitting the intraday high. After 23:00, prices fell back below the average price line, entering a pace of being in the doldrums. Near the close, futures mostly moved sideways within the 23,240-23,270 yuan/mt range, ultimately closing at 23,255 yuan/mt, edging down from the previous settlement.
Spot-futures price spread daily report: According to SMM data, on May 12, the SMM ADC12 spot price's theoretical premium over the most-traded cast aluminum alloy contract (AD2606) at the 10:15 closing price narrowed to 355 yuan/mt.
Warrant daily report: SHFE data showed that on May 12, total registered warrants for cast aluminum alloy stood at 33,884 mt, up 237 mt from the previous trading day. By region, Shanghai's total registered volume was 776 mt, unchanged from the previous trading day; Guangdong's total registered volume was 10,367 mt, down 30 mt; Jiangsu's total registered volume was 6,176 mt, up 177 mt; Zhejiang's total registered volume was 9,747 mt, up 90 mt; Chongqing's total registered volume was 4,600 mt, up 237 mt; Sichuan's total registered volume was 995 mt, flat from the previous trading day.
Aluminum scrap: On Tuesday, A00 aluminum prices edged down 10 yuan/mt from the previous trading day, while the aluminum scrap market remained largely stable. Shredded aluminum tense scrap (priced based on aluminum content) traded in a mainstream range of 20,500-21,000 yuan/mt (tax-exclusive). Imported zorba (Ningbo Port) saw its weekly trading range raised by 200 yuan/mt to 21,870-22,070 yuan/mt (tax-inclusive). On the price difference between A00 aluminum and aluminum scrap, on May 12, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was recorded at 2,723 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap was 2,078 yuan/mt. Supply side, the tightening trend in compliant invoice sources intensified, raw material prices swung wildly, and aluminum scrap yards generally held back from selling and held prices firm. High LME prices led import traders to adopt cautious strategies, and subsequent imports are expected to pull back. Demand side, the traditional off-season combined with prominent compliant invoice issues led some regional enterprises to reduce or halt production. Wrought aluminum alloy scrap was supported by secondary aluminum plate/sheet and strip operating rates, but the support was limited. Downstream procurement was mainly driven by rigid demand, with strong wait-and-see sentiment. The off-season effect on the demand side continued, with downstream secondary aluminum enterprises cautiously watching the market. Procurement was mainly small-lot restocking for rigid demand. The divergence between aluminum tense scrap and wrought aluminum alloy scrap persisted, order growth remained limited, and vigilance is still needed against market risks from aluminum price fluctuations and tight supply.
Silicon metal: On May 12, 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. Silicon prices in Kunming, Huangpu Port, Tianjin, Northwest China, Xinjiang, Shanghai, and Sichuan remained stable.
Markets outside China: Current import ADC12 quotes remained at the high range of $3,320-3,400/mt, with instant import losses still exceeding 3,000 yuan/mt, and the theoretical import window continued to stay closed.
Summary: On Tuesday, the ADC12 market mainly operated with stable prices. A00 aluminum price fluctuations were limited, downstream demand performed steadily, trading volume showed no significant increase, and both supply and demand sides were temporarily stable, with enterprises generally adopting a wait-and-see attitude. However, the recent tightening of reverse invoicing policies continued, with the scope of affected regions expanding, leading to enterprises lacking input invoices and compliant raw material supply becoming tight. Meanwhile, the inverted price spread between domestic and overseas markets meant imports are expected to decline, offering limited supplementation to the domestic market. Overall raw material circulation remained tight, and the cost side provided certain support for prices. Overall, in the short term, ADC12 prices will move sideways amid the tug-of-war between cost support and weak demand.
[Data source disclaimer: Data other than publicly available 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.]
