Import losses narrowed slightly, and social inventory of secondary aluminum alloy ingots continued to build up [SMM Morning Comment on Cast Aluminum Alloy]

Futures market: The most-traded cast aluminum alloy 2511 contract opened at 19,880 yuan/mt overnight, hitting a high of 19,945 yuan/mt and a low of 19,870 yuan/mt, before closing at 19,940 yuan/mt, up 10 yuan/mt (0.05%) from the previous trading day. Trading volume stood at 806 lots, while open interest reached 8,747 lots, with bears dominating the position reduction.

Spot-futures price spread report: According to SMM data, the spot price of SMM ADC12 showed a theoretical premium of 135 yuan/mt against the closing price of the most-traded cast aluminum alloy contract (AD2511) at 10:15 am on July 11.

Aluminum scrap: Last Friday, spot primary aluminum fell 30 yuan/mt from the previous trading day, with SMM A00 spot closing at 20,790 yuan/mt. In the scrap market, prices in some regions lagged behind and continued to rise. By product, baled UBC rebounded 50 yuan/mt WoW. Regionally, Shanghai, Jiangsu, and Shandong closely followed aluminum price movements with adjustments ranging from 0-50 yuan/mt, while Hunan, Guangdong, Jiangxi, and Anhui lagged behind, collectively raising prices last Friday. The scrap market is expected to hover at highs this week, with product differentiation and regional disparities persisting. Shredded aluminum tense scrap, supported by tight supply, is likely to maintain price resilience, fluctuating rangebound between 15,800-17,400 yuan/mt. Baled UBC faces greater downward pressure due to weak off-season demand, potentially dropping to 15,200-15,700 yuan/mt. Regionally, east China is expected to continue tracking primary aluminum closely, with daily adjustments possibly widening to 150-200 yuan/mt. Inland and southern provinces (e.g., Jiangxi, Hunan, Guizhou, Guangdong) may lack upward momentum due to price lag and local supply-demand dynamics, potentially widening price spreads.

Overseas market: Imported ADC12 CIF offers held steady at $2,450-2,480/mt, while spot import prices rose slightly to around 19,300 yuan/mt, narrowing the immediate import loss to approximately 800 yuan/mt. Local ADC12 offers in Thailand (excluding tax) concentrated at 82-83 baht/kg.

Inventory: SMM data showed that social inventories of secondary aluminum alloy ingots in Foshan, Ningbo, and Wuxi totaled 25,312 mt on July 11, up 196 mt from the previous day and 3,324 mt WoW.

Summary: Aluminum prices fluctuated marginally last Friday, with most secondary aluminum market participants maintaining stable offers. SMM ADC12 prices held flat at 20,100 yuan/mt. Recently, tightening scrap supply both domestically and overseas has significantly increased raw material procurement difficulties for secondary aluminum producers, intensifying market competition for materials and further elevating production costs, expanding corporate losses. Constrained by both material shortages and weakening demand, multiple secondary aluminum producers have been forced to cut production, with some even halting operations entirely. 综合来看，强成本支撑与弱需求抑制持续博弈，预计7月ADC12价格整体将维持窄幅震荡格局。

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