The most-traded cast aluminum alloy futures contract rebounds slightly overnight, while the spot market shows weak upward momentum [SMM Morning Comment on Cast Aluminum Alloy]

SMM Morning Comment on Cast Aluminum Alloy on July 16

Futures Market: Overnight, the most-traded AD2511 cast aluminum alloy futures contract opened at 19,785 yuan/mt, reaching a high of 19,830 yuan/mt and a low of 19,750 yuan/mt, before closing at 19,795 yuan/mt. This represented an increase of 5 yuan/mt or 0.03% from the previous trading day. Trading volume stood at 757 lots, with open interest at 8,496 lots, primarily driven by longs increasing their positions. 

Spot-Futures Price Spread Daily Report: According to SMM data, on July 15, the SMM ADC12 spot price was at a theoretical premium of 175 yuan/mt over the closing price of the most-traded cast aluminum alloy futures contract (AD2511) at 10:15 a.m.

Industry News: (1) Shunbo Alloy released its 2025 semi-annual performance forecast on the evening of July 14. After preliminary calculations by the financial department, it is expected that the company will achieve a net profit attributable to shareholders of 150 million to 190 million yuan from January to June, representing a year-on-year increase of 78.81% to 126.49%. During the reporting period, the overall rise in aluminum prices and an increase in the company's product sales volume led to a simultaneous increase in gross profit. The company's revenue scale expanded, and the scale of VAT additional deductions and immediate tax refunds after payment increased. By optimizing cash management, the company's scale of time deposits increased, driving growth in wealth management returns.

Aluminum Scrap Market: On Tuesday, the spot price of primary aluminum rose slightly by 40 yuan/mt from the previous trading day. SMM A00 spot aluminum closed at 20,510 yuan/mt, with the aluminum scrap market generally following the increase. By product, baled UBC prices rebounded by 50 yuan/mt MoM, basically following the aluminum price increase. Regionally, Shanghai, Jiangsu, Shandong, and other places closely followed aluminum price movements, with price adjustments ranging from 50-100 yuan/mt. In Hunan, Guangdong, Anhui, and other places, price adjustments lagged behind aluminum price movements, with quotes remaining flat. It is expected that the aluminum scrap market will continue to fluctuate at highs this week, with product differentiation and regional differences persisting. Shredded aluminum tense scrap is expected to maintain price resilience due to strong supply constraints, with the operating range expected to fluctuate rangebound within 15,500-17,000 yuan/mt. Baled UBC is under significant downward pressure due to weak demand during the off-season, with prices possibly dropping to 15,000-15,500 yuan/mt.

Overseas Market: The CIF import price of ADC12 slightly increased to $2,460-2,490/mt. The import spot price decreased by 100 yuan/mt to around 19,300 yuan/mt, with the immediate import loss widening again to around 900 yuan/mt. The local tax-excluded price of ADC12 in Thailand was concentrated at 82-83 Thai baht/kg.

Inventory: According to SMM statistics, on July 15, the daily social inventory of secondary aluminum alloy ingots in Foshan, Ningbo, and Wuxi totaled 27,592 mt, an increase of 913 mt from the previous trading day and 3,346 mt from the previous Tuesday.

Summary: Following a significant drop in aluminum prices on Monday, prices rebounded slightly on Tuesday. Quotations in the secondary aluminum market generally remained stable, with the SMM ADC12 price holding steady at 20,000 yuan/mt. The price spread between A00 and ADC12 slightly widened. Current demand side remains sluggish, with secondary aluminum enterprises experiencing a significant decline in orders compared to June and weak transaction performance. Overall, insufficient raw material supply provides strong support for secondary aluminum alloy prices, but weak demand restricts price increases. The short-term ADC12 price is expected to maintain a rangebound fluctuation pattern.

[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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