The most-traded cast aluminum alloy contract hits a new high since listing, with short-term cost support remaining solid [SMM Morning Comment on Cast Aluminum Alloy]

6.18 SMM Morning Comment on Cast Aluminum Alloy

Futures Market: Overnight, the most-traded AD2511 cast aluminum alloy futures contract opened at 19,590 yuan/mt, hitting a new high since its listing at 19,650 yuan/mt, with a low of 19,580 yuan/mt, and finally closed at 19,620 yuan/mt, up 55 yuan/mt or 0.28% from the previous close. Trading volume was 3,178 lots, and open interest was 9,017 lots.

Spot-Futures Price Spread Daily Report: According to SMM data, on June 17, the theoretical premium of the SMM ADC12 spot price over the closing price of the most-traded cast aluminum alloy futures contract (AD2511) at 10:15 narrowed to 490 yuan/mt.

Aluminum Scrap Market: On Tuesday, spot primary aluminum prices continued to fall by 10 yuan/mt from the previous trading day. SMM A00 aluminum closed at 20,620 yuan/mt, while aluminum scrap market prices remained largely unchanged from the previous day. Baled UBC aluminum scrap was concentratedly quoted at 15,350-15,850 yuan/mt (tax excluded), and shredded aluminum tense scrap was concentratedly quoted at 15,900-17,400 yuan/mt (tax excluded). Regarding the price difference between A00 aluminum and aluminum scrap, the price difference between SMM mechanical casting aluminum scrap and A00 aluminum in Shanghai widened by 25 yuan/mt to 1,850 yuan/mt compared to last Thursday, while the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan narrowed by 150 yuan/mt to 1,505 yuan/mt compared to last Thursday. It is expected that the aluminum scrap market will continue to fluctuate at highs. The tight supply situation of aluminum tense scrap is difficult to change, with solid price support. Wrought aluminum alloy scrap will continue to fluctuate rangebound with primary aluminum, but the risk of a high-level correction in primary aluminum, coupled with weak demand during the off-season, may suppress upside room. The operating rate of downstream secondary aluminum enterprises may remain low, with a difficult balance between costs and orders.

Overseas Market: Currently, the CIF import price of ADC12 is slightly maintained at 2,420-2,450 US dollars/mt, the import spot price remains stable at around 19,200 yuan/mt, and the immediate import loss is stable within the range of 500-600 yuan/mt. The local ADC12 price in Thailand, excluding tax, is temporarily stable at 81-82 Thai baht/kg.

Inventory: According to SMM statistics, on June 17, the combined daily social inventory of secondary aluminum alloy ingots in Foshan, Ningbo, and Wuxi was 17,335 mt, an increase of 238 mt from the previous trading day.

Summary: On Tuesday, the SMM A00 aluminum price fell slightly by 10 yuan/mt from the previous trading day to 20,620 yuan/mt, while the domestic SMM ADC12 price continued to hold steady within the range of 19,900-20,200 yuan/mt. Yesterday, aluminum prices fell slightly, and the prices of secondary aluminum raw materials, especially aluminum tense scrap, remained firm, providing support for ADC12 prices. Currently in the traditional off-season, new orders are growing sluggishly, and insufficient demand is constraining the upside room for ADC12 prices. However, cost support still exists, and it is expected that ADC12 prices will remain rangebound in the short term.

[The information provided is for reference only. This article does not constitute direct advice for investment research decisions. Clients should make decisions cautiously and not rely on this as a substitute for independent judgment. Any decisions made by clients are unrelated to SMM.]

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