The most-traded contract fluctuated downward overnight, and the narrowing price difference between A00 aluminum and aluminum scrap highlighted cost support. [SMM Morning Comment on Cast Aluminum Alloy]

6.25 SMM Morning Comment on Cast Aluminum Alloy

Futures Market: Overnight, the most-traded AD2511 cast aluminum alloy futures contract opened at 19,625 yuan/mt, with a high of 19,640 yuan/mt, a low of 19,530 yuan/mt, and closed at 19,555 yuan/mt, down 70 yuan/mt or 0.36% from the previous trading day. Trading volume was 1,779 lots, and open interest was 8,095 lots, with bears mainly increasing their positions.

Spot-Futures Price Spread Report: According to SMM data, on June 24, the SMM ADC12 spot price was at a theoretical premium of 405 yuan/mt over the closing price of the most-traded cast aluminum alloy futures contract (AD2511) at 10:15 a.m.

Aluminum Scrap Market: On Tuesday, spot primary aluminum prices fell by 110 yuan/mt from the previous trading day, with SMM A00 spot aluminum closing at 20,540 yuan/mt. Aluminum scrap market prices generally pulled back. Regionally, Shanghai, Jiangsu, and Shandong closely followed aluminum price movements, with price adjustments ranging from 50-100 yuan/mt. In Jiangxi, suppliers refused to budge on prices, with no price adjustments seen for three consecutive trading days. By product, baled UBC prices have followed aluminum's downward trend since last Thursday, with a cumulative decline of 150-200 yuan/mt. In terms of price difference between A00 aluminum and aluminum scrap, the price spread between mechanical casting aluminum scrap and A00 aluminum in Shanghai narrowed by 35 yuan/mt to 1,823 yuan/mt compared to last Wednesday, while the price difference between mixed aluminum extrusion scrap free of paint and A00 aluminum in Foshan narrowed by 112 yuan/mt to 1,486 yuan/mt compared to last Wednesday. Given the difficulty in actual shipments, aluminum scrap suppliers adopted a cautious wait-and-see attitude towards price adjustments amid aluminum prices fluctuating at highs.

Overseas Markets: The CIF import price of ADC12 remained at 2,430-2,470 US dollars/mt, with the import spot price hovering around 19,200 yuan/mt, and the instantaneous import loss still in the range of 700-800 yuan/mt. The domestic tax-excluded price of ADC12 in Thailand was concentrated at 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 18,534 mt on June 24, an increase of 34 mt from the previous trading day.

Summary: On Tuesday, SMM ADC12 prices temporarily stabilized at 19,900-20,100 yuan/mt. Suppressed by the traditional off-season, demand remained weak, and market transactions were sluggish. Sluggish growth in terminal orders constrained the upward movement of ADC12 prices, compounded by intensified market competition from low-priced supplies. However, the cost side remained relatively firm, providing some support to prices. It is expected that under the deepening impact of the off-season, ADC12 prices will remain in the doldrums in the short term. Close attention should be paid to changes in raw material circulation and signs of marginal improvement in 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 solely on this information, replacing their own independent judgment. Any decisions made by clients are unrelated to SMM.]

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