5.21 SMM Cast Aluminum Alloy Morning Comment
Futures: The most-traded aluminum alloy contract AD2607 closed at 23,115 yuan/mt overnight, up 35 yuan from the previous trading day, a gain of 0.15%. Trading volume was 2,299 lots, open interest was 15,130 lots, down 15 lots slightly, indicating relatively small divergence in capital flows and cautious tug-of-war between longs and shorts. Prices have risen above the 5/10-day moving averages, with short-term downside momentum weakening. The medium-term trend remains in the doldrums, with no clear bullish trend yet formed.
Industry dynamics: According to the latest customs data, China's aluminum scrap imports in April 2026 were approximately 171,000 mt, down about 10% YoY. Cumulative imports from January to April 2026 totaled 700,000 mt. By source country, China's major aluminum scrap import sources in April were Thailand, the UK, Japan, the US, Australia, and other countries and regions, with Thailand accounting for 20.7% of China's total imports. Unwrought aluminum alloy imports were 73,500 mt, down 15.4% YoY and down 12.9% MoM. Cumulative imports from January to April were 313,900 mt, down 14.6% YoY. On the export side, unwrought aluminum alloy exports in April reached 46,300 mt, a record single-month high, up 179.7% YoY and up 68.9% MoM. Cumulative exports from January to April were 111,200 mt, up 58.1% YoY. Since March, affected by Middle East geopolitical conflicts and overseas supply disruptions, overseas aluminum alloy ingot prices have continued to rise, with the price spread between domestic and overseas markets inverting further. Currently, the theoretical loss on importing ADC12 into China has exceeded 3,000 yuan/mt, the import window is essentially closed, and imports remain under pressure. Meanwhile, the supply gap in markets outside China persists, driving notable growth in export demand, with export volumes maintaining expansion for two consecutive months.
Spot-futures price spread daily report: According to SMM data, on May 20, the SMM ADC12 spot price was at a theoretical premium of 580 yuan/mt to the most-traded cast aluminum alloy contract (AD2607) closing price at 10:15.
Warrant daily report: SHFE data showed that on May 20, total registered warrants for cast aluminum alloy were 38,401 mt, down 303 mt from the previous trading day. Of this, Shanghai had 2,515 mt (unchanged), Guangdong had 10,428 mt (down 241 mt), Jiangsu had 7,532 mt (up 300 mt), Zhejiang had 11,942 mt (down 212 mt), Chongqing had 4,989 mt (down 150 mt), and Sichuan had 995 mt (unchanged).
Aluminum scrap: Primary aluminum prices edged up 60 yuan/mt from the previous trading day yesterday, while aluminum scrap market prices remained generally stable. Aluminum scrap market is expected to continue fluctuating at highs this week, with shredded aluminum tense scrap (priced based on aluminum content) mainstream range maintained at 20,500-21,300 yuan/mt (tax-exclusive). Supply side, the tightening fiscal and tax supervision is unlikely to ease in the short term, and ticket shortages and expectations of reduced imports will continue to provide floor support for aluminum scrap prices, with the market pattern of yards holding prices firm and holding back from selling persisting. Demand side, off-season effects continue to intensify, with insufficient incremental end-user orders. Secondary aluminum enterprises are cutting production, and downstream procurement remains dominated by small just-in-time restocking, making concentrated stockpiling unlikely. The secondary aluminum market is expected to continue its pattern of weakness in both supply and demand.
Silicon metal: On May 20, SMM east China non-oxygen blown #553 was unchanged from the previous day; oxygen-blown #553 was unchanged; #521 was unchanged; #441 was unchanged; #421 was unchanged; #421 for silicone use was down 50 yuan/mt; #3303 was unchanged. Some silicon prices in Xinjiang continued to decline. Silicon prices in Huangpu Port, Tianjin, Kunming, Northwest China, Sichuan, and Shanghai remained stable.
Markets outside China: On the import side, current import ADC12 quotes edged down but remained in the high range of $3,340-3,430/mt, with immediate import losses exceeding 3,000 yuan/mt and the theoretical import window remaining closed.
Summary: The ADC12 market was dominated by a wait-and-see approach with stable prices yesterday, with SMM ADC12 prices unchanged from the previous day at 23,600 yuan/mt. Demand side, narrow aluminum price fluctuations and tepid downstream procurement limited upward price adjustment room. Cost side, tight compliant aluminum scrap supply, persistent ticket shortage issues, and elevated import costs provided clear cost support. Additionally, signs of production cuts at some producers emerged, with market expectations of subsequent supply tightening warming up. Combined with cost support, enterprises have the willingness to increase prices in the short term. Overall, ADC12 prices are expected to move sideways in the near term.
[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.]
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