Aluminum prices weaken, with strong wait-and-see sentiment for secondary aluminum. ADC12 fluctuates rangebound in the short term [SMM Morning Comment on Cast Aluminum Alloy]

7.1 SMM Cast Aluminum Alloy Morning Comment

Futures Market: Overnight, the most-traded cast aluminum alloy AD2511 contract opened at 19,785 yuan/mt, peaked at 19,820 yuan/mt, bottomed at 19,720 yuan/mt, and closed at 19,795 yuan/mt, down 5 yuan/mt or 0.03% from the previous trading day. Trading volume reached 979 lots, open interest stood at 8,464 lots, with bears dominating position increases.

Basis Report: SMM data shows the June 30 theoretical premium of SMM ADC12 spot price over the 10:15 AM closing price of the cast aluminum alloy AD2511 contract was 330 yuan/mt.

Aluminum Scrap Sector: On Monday, primary aluminum spot prices fell 100 yuan/mt from the previous day, with SMM A00 closing at 20,780 yuan/mt. Aluminum scrap markets generally followed suit, with baled UBC quotations concentrated at 15,400-15,900 yuan/mt (tax excluded) and shredded aluminum tense scrap at 15,800-17,300 yuan/mt (tax excluded). The scrap aluminum market is expected to maintain high-level volatility this week. Shredded aluminum tense scrap, supported by tight supply, shows strong price resilience with forecasted fluctuations within 15,800-17,400 yuan/mt. Baled UBC prices will track aluminum price trends and scrap availability, remaining elevated during the off-season but with limited upside room.

Overseas Markets: Import ADC12 CIF offers rose slightly to $2,450-2,480/mt, while import spot prices dropped 100 yuan/mt to around 19,200 yuan/mt, widening immediate import losses. Local Thai ADC12 (tax excluded) quotations clustered at THB 82-83/kg.

Inventory Update: SMM statistics show total social inventory of secondary aluminum alloy ingots in Foshan, Ningbo, and Wuxi reached 19,761 mt on June 30, up 238 mt from the previous trading day.

Market Outlook: Aluminum prices weakened overall on Monday, with secondary aluminum markets adopting a cautious wait-and-see stance and limited pricing adjustments. SMM ADC12 prices remained stable at 20,000-20,200 yuan/mt. Persistent weak demand and downstream just-in-time procurement continue to suppress market activity. Weak terminal order growth in July will limit ADC12 price upside, though cost support remains firm as a price floor. With no immediate consumption improvement expected and deepening off-season impacts, ADC12 prices are forecast to fluctuate rangebound.

[Information provided is for reference only and does not constitute direct investment research advice. Clients should exercise independent judgment, as SMM bears no responsibility for decisions made based on this content.]

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