7.4 SMM Morning Comment on Cast Aluminum Alloy
Futures: Overnight, the most-traded AD2511 cast aluminum alloy futures contract opened at 19,950 yuan/mt, with a high of 19,960 yuan/mt, a low of 19,905 yuan/mt, and closed at 19,925 yuan/mt, down 40 yuan/mt or 0.20% from the previous trading day. Trading volume was 1,043 lots, and open interest was 9,365 lots, with bulls mainly reducing their positions.
Spot-Futures Price Spread Daily Report: According to SMM data, on July 3, the theoretical premium of SMM ADC12 spot price over the closing price of the most-traded cast aluminum alloy futures contract (AD2511) at 10:15 a.m. narrowed to 160 yuan/mt.
Aluminum Scrap: On Thursday, the spot price of primary aluminum rose by 50 yuan/mt from the previous trading day. SMM A00 spot aluminum closed at 20,860 yuan/mt, and the aluminum scrap market prices generally followed the rise. By product, baled UBC rose by 50 yuan/mt MoM, following the aluminum price increase. Except for tight supplies in Anhui, Hubei, and other regions, where downstream scrap utilization enterprises faced difficulties in purchasing and raised their purchase prices, ADC12 aluminum shavings and shredded aluminum tense scrap increased by 100-200 yuan/mt. In other regions, the quotes for aluminum tense scrap remained stable MoM. In terms of the price difference between A00 aluminum and aluminum scrap, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan increased by 60 yuan/mt from the previous day to 1,857 yuan/mt, while the price difference between A00 aluminum and mechanical casting aluminum scrap in Shanghai decreased by 22 yuan/mt from the previous day to 1,845 yuan/mt.
Overseas Market: The CIF import price of ADC12 remained at 2,450-2,480 US dollars/mt, with the import spot price around 19,200 yuan/mt, and the immediate import loss around 800 yuan/mt. The local tax-free quote for ADC12 in Thailand was concentrated at 82-83 Thai baht/kg.
Inventory: According to SMM statistics, on July 3, the social inventory of secondary aluminum alloy ingots in major domestic consumption areas was 23,232 mt, an increase of 2,646 mt from the previous Thursday. Among them, Foshan region increased by 1,039 mt, Ningbo region increased by 906 mt, and Wuxi region increased by 700 mt, contributing the main increments.
Summary: On Thursday, aluminum prices continued to rise slightly, while the secondary aluminum market struggled to catch up. The SMM ADC12 price range remained stable at 20,000-20,200 yuan/mt. Entering July, factors such as the high-temperature off-season and high aluminum prices continued to impact downstream orders, with some downstream enterprises initiating production reduction modes. Despite active inquiries from futures-to-spot traders and an increase in trading volume of delivery brands during the week, the end-use consumption market remained sluggish, posing a key resistance to price increases. Facing the dual pressures of raw material supply deficits and weak market demand, some secondary aluminum manufacturers have temporarily halted furnaces for maintenance or reduced their operating rates. Overall, with no substantial improvement in demand, prices encounter resistance, but the cost support logic remains, and it is expected that secondary aluminum alloy prices will maintain a narrow rangebound fluctuation in the short term.
[The information provided is for reference only. This article does not constitute direct advice for investment research and decision-making. Clients should make cautious decisions and should not replace their independent judgment with this. Any decisions made by clients are not related to SMM.】
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