The futures market for cast aluminum alloy rose overnight, and social inventory maintained the trend of inventory buildup [SMM Morning Comment on Cast Aluminum Alloy]

6.27 SMM Cast Aluminum Alloy Morning Comment

Futures Market: Overnight, the most-traded cast aluminum alloy AD2511 contract opened at the session low of 19,705 yuan/mt, fluctuated upward to hit a high of 19,885 yuan/mt, and finally closed at 19,850 yuan/mt. The contract rose 135 yuan/mt or 0.68% from the previous trading day, with trading volume of 2,943 lots and open interest of 8,263 lots, primarily driven by bulls increasing positions.

Basis Report: According to SMM data, the SMM ADC12 spot price held a theoretical premium of 330 yuan/mt against the 10:15 closing price of the most-traded cast aluminum alloy contract (AD2511) on June 26.

Aluminum Scrap Market: On Thursday, spot primary aluminum prices increased 80 yuan/mt from the previous trading day, with SMM A00 spot aluminum closing at 20,610 yuan/mt. Aluminum scrap market prices remained largely stable day-on-day. During the traditional off-season, downstream scrap utilization enterprises faced sluggish order releases, with procurement activities mainly restricted to rigid demand. Baled UBC scrap aluminum was concentratedly quoted at 15,200-15,700 yuan/mt (tax excluded), while shredded aluminum tense scrap was quoted at 15,800-17,300 yuan/mt (tax excluded prices). Considering shipping difficulties, aluminum scrap suppliers maintained a cautious wait-and-see attitude towards price adjustments amid fluctuating aluminum prices at highs. The aluminum scrap market is expected to continue fluctuating at highs next week.

Overseas Market: Import ADC12 CIF prices remained at $2,430-2,470/mt, with import spot prices hovering around 19,200 yuan/mt and instant losses still in the 700-800 yuan/mt range. Local ADC12 prices in Thailand (tax excluded) were concentrated at 82-83 Thai baht/kgZ6/>Inventory: According to SMM statistics, as of June 26, social inventory of secondary aluminum alloy ingots in major domestic consumption areas stood at 20,587 mt, up 1,295 mt from the previous Thursday, extending the inventory buildup trend.

Summary: This week saw a continued balance between cost support and weak off-season demand. ADC12 prices temporarily stabilized after a 50-100 yuan/mt decrease during the week, but intensified market competition due to low-priced supplies. In the short term, while cost support remains, ADC12 prices are expected to maintain a fluctuating trend amid deepening off-season pressures and inventory buildup. Close attention should be paid to marginal changes in raw material circulation and signs of demand-side improvement.

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

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