Overnight Aluminum Futures Closed Lower, Spot Cast Aluminum Alloy Remained Under Short-Term Pressure [SMM Cast Aluminum Alloy Morning Comment]

3.19 SMM Morning Comment on Cast Aluminum Alloy

Futures: After opening at night, the AD2604 cast aluminum alloy contract quickly moved lower, hitting an intraday low of 23,325 yuan/mt, then fluctuated upward, with narrower intraday swings. Prices repeatedly saw a tug-of-war in the 23,400-23,560 yuan/mt range, and held near 23,570 yuan/mt into the close, down slightly 0.11% from the previous trading day. Trading volume and open interest both declined, indicating cautious fund sentiment and a strong wait-and-see mood in the market. Technically, prices remained in a consolidation phase after pulling back from earlier highs. The RSI stayed in neutral-to-strong territory, with a relatively balanced tug-of-war between longs and shorts. In the short term, the market may continue its fluctuating trend, and attention should be paid to the breakout direction of the 23,300-23,600 yuan/mt range.

Spot-Futures Price Spread Daily: According to SMM data, on March 18, the theoretical spot-futures price spread of SMM ADC12 spot prices over the 10:15 closing price of the most-traded cast aluminum alloy contract (AD2604) widened to 1,515 yuan/mt.

Warrant Daily: SHFE data showed that on March 18, total registered cast aluminum alloy warrants stood at 51,428 mt, down 1,650 mt from the previous trading day. Of this, total registered volume in Shanghai was 4,266 mt, down 242 mt from the previous trading day; Guangdong was 18,431 mt, down 361 mt; Jiangsu was 6,312 mt, down 506 mt; Zhejiang was 16,889 mt, down 449 mt; Chongqing was 4,053 mt, down 61 mt; and Sichuan was 1,477 mt, down 31 mt.

Aluminum scrap: Yesterday, spot primary aluminum fell 390 yuan/mt from the previous trading day, and the aluminum scrap market generally followed lower. For the price difference between A00 aluminum and aluminum scrap, on March 18, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was 3,450 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap was 2,429 yuan/mt. The aluminum scrap market is expected to hover at highs this week, with the mainstream range for shredded aluminum tense scrap (priced based on aluminum content) running around 20,400-21,000 yuan/mt (ex-tax). Primary aluminum will likely remain the core driver under the impact of geopolitical conditions, with rising risks of price fluctuations. Supply side, cargoes were steadily released, but policy uncertainty continued to weigh on circulation efficiency. Demand side, the pace of peak-season recovery was relatively slow, while high prices and wild swings continued to suppress purchase willingness. In the short term, close attention should be paid to primary aluminum trends amid developments in geopolitical conflicts, the recovery of downstream orders, and the implementation of recycled recovery policies, while remaining alert to the risk of a sharp pullback from highs.

Silicon metal: On March 18, SMM east China non-oxygen blown #553 was unchanged from the previous day; oxygen-blown #553 was unchanged from the previous day; #521 was unchanged from the previous day; #441 was unchanged from the previous day; #421 was unchanged from the previous day; #421 for silicone use was unchanged from the previous day; and #3303 was unchanged from the previous day. Some silicon prices in Huangpu Port, Tianjin, and parts of north-west China were lowered. Silicon prices in Kunming, Sichuan, Xinjiang, and Shanghai held steady

Markets outside China: Overseas ADC12 quotes were around $3,400/mt, with immediate import losses remaining at around 2,000 yuan, and the import window closed.

Summary: On Wednesday, the overall ADC12 market showed a downward trend, with mainstream producers generally lowering quotes by 100 yuan/mt. This price adjustment was mainly affected by the pullback in aluminum prices, which weakened cost support, and enterprises accordingly adjusted quotes to follow market changes. However, the overall magnitude of the adjustment remained relatively restrained, indicating a rather cautious market sentiment. Demand side, downstream enterprises were relatively sensitive to price fluctuations recently. Although there was some willingness to restock during the price decline phase, overall procurement was still mainly based on immediate needs, with no obvious concentrated volume release, and market demand was mediocre. In the short term, amid aluminum remaining in the doldrums, mediocre demand performance, and cost support, ADC12 prices were expected to continue fluctuating rangebound, with both upside and downside room relatively limited.

[Data Source Statement: Except for public information, all other data is processed and derived by SMM based on public information, market communication, and SMM's internal database models, and is for reference only and does not constitute decision-making advice.]