The most-traded cast aluminum alloy futures contract rose slightly by 0.13% overnight, with the tug-of-war between costs and off-season demand continuing [SMM Cast Aluminum Alloy Morning Comment]

6.24 SMM Morning Comment on Cast Aluminum Alloy

Futures Market: Overnight, the most-traded AD2511 cast aluminum alloy futures contract opened at 19,700 yuan/mt, with a high of 19,740 yuan/mt and a low of 19,650 yuan/mt. It closed at 19,705 yuan/mt, up 25 yuan/mt or 0.13% from the previous trading day. Trading volume was 1,138 lots, and open interest stood at 8,412 lots, with longs mainly increasing their positions.

Spot-Futures Price Spread Daily Report: According to SMM data, on June 23, the SMM ADC12 spot price was at a theoretical premium of 330 yuan/mt over the closing price of the most-traded cast aluminum alloy futures contract (AD2511) at 10:15 a.m.

Aluminum Scrap: On Monday, spot primary aluminum prices fell by 70 yuan/mt from the previous trading day, with SMM A00 spot aluminum closing at 20,650 yuan/mt. The aluminum scrap market prices generally pulled back. In the traditional off-season, downstream scrap utilization enterprises faced weak order releases, with procurement mainly driven by immediate needs. Baled UBC aluminum scrap was concentratedly quoted at 15,300-15,800 yuan/mt (tax not included), and shredded aluminum tense scrap was concentratedly quoted at 15,800-17,300 yuan/mt (tax not included). This week, the aluminum scrap market is expected to continue the pattern of "fluctuating at highs with product differentiation," remaining generally strong.

Overseas Markets: The CIF import price of ADC12 rose to $2,430-2,470/mt, while the import spot price remained around 19,200 yuan/mt, with the immediate import loss widening to the range of 700-800 yuan/mt. The domestic ADC12 price in Thailand (tax not included) rose to 82-83 Thai baht/kg.

Inventory: According to SMM statistics, the daily social inventory of secondary aluminum alloy ingots in Foshan, Ningbo, and Wuxi totaled 18,501 mt on June 23, up 19 mt from the previous trading day.

Summary: Yesterday, aluminum prices continued to decline slightly, with SMM ADC12 prices falling by 50 yuan/mt to 19,900-20,100 yuan/mt. Market quotes were slightly differentiated, with some enterprises slightly lowering their quotes due to weak demand, while others maintained firm prices supported by cost pressures. Overall, the rigid support from costs continued to clash with weak off-season demand, keeping ADC12 prices fluctuating rangebound. As the off-season deepens, ADC12 prices are expected to remain in the doldrums in the short term. It is recommended to closely monitor the circulation of raw materials and the marginal changes in off-season demand.

[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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