Overseas prices remain high, and the immediate loss of ADC12 imports widens [SMM Morning Comment on Cast Aluminum Alloy]

7.17 SMM Cast Aluminum Alloy Morning Comment

Futures: The most-traded cast aluminum alloy AD2511 contract opened at 19,780 yuan/mt overnight, hitting a high of 19,845 yuan/mt and a low of 19,755 yuan/mt, before closing at 19,845 yuan/mt, up 25 yuan/mt (0.13%) from the previous session. Trading volume stood at 618 lots with open interest at 8,529 lots, mainly driven by long position increases.

Spot-Futures Price Spread Report: According to SMM data, the SMM ADC12 spot price showed a theoretical premium of 180 yuan/mt against the closing price of the most-traded cast aluminum alloy contract (AD2511) at 10:15 on July 16.

Aluminum scrap: Wednesday's spot primary aluminum price rebounded slightly by 10 yuan/mt from the previous day, with SMM A00 spot aluminum closing at 20,520 yuan/mt. The aluminum scrap market remained flat overall. Yesterday, baled UBC was quoted at 15,200-15,700 yuan/mt (tax excluded), while shredded aluminum tense scrap traded at 15,900-17,400 yuan/mt (tax excluded). The aluminum scrap market is expected to continue hovering at highs this week, with persistent product differentiation and regional disparities. Shredded aluminum tense scrap prices are likely to maintain resilience supported by tight supply, fluctuating rangebound between 15,500-17,000 yuan/mt. Baled UBC faces greater downward pressure due to weak off-season demand, potentially dropping to 15,000-15,500 yuan/mt.

Overseas market: Imported ADC12 CIF offers held steady at $2,460-2,490/mt, with spot import prices stabilizing around 19,300 yuan/mt, showing an immediate import loss of about 900 yuan/mt. Local Thai ADC12 tax-exclusive offers concentrated at 82-83 baht/kg.

Inventory: SMM data showed that the daily social inventory of secondary aluminum alloy ingots in Foshan, Ningbo and Wuxi totaled 27,996 mt on July 16, up 403 mt from the previous day and 3,450 mt WoW.

Summary: Aluminum prices extended slight rebounds on Wednesday while secondary aluminum market offers remained stable, with SMM ADC12 holding at 20,000 yuan/mt. Persistent demand weakness and sluggish downstream procurement sentiment led to declining orders for secondary aluminum producers, with lackluster transactions. Overall, while undersupply of raw materials provides strong support for secondary aluminum alloy prices, weak demand continues to cap upside potential. ADC12 prices are expected to fluctuate rangebound in the short term.

[The information provided is for reference only. This article does not constitute direct investment research advice. Clients should make prudent decisions and not use this to replace independent judgment. Any decisions made by clients are unrelated to SMM.]

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