Cast aluminum alloy futures hit a new high, with ADC12 aluminum alloy prices rising driven by costs [SMM morning comment on cast aluminum alloy]

7.21 SMM Cast Aluminum Alloy Morning Comment

Futures: On Friday night, the most-traded cast aluminum alloy AD2511 contract opened at the day's low of 19,885 yuan/mt, fluctuated upward to hit a record high of 20,145 yuan/mt since listing, and finally closed at 20,120 yuan/mt, up 245 yuan/mt (1.23%) from the previous trading day. Trading volume stood at 3,133 lots, with open interest at 9,213 lots, mainly driven by long position increases.

Spot-Futures Price Spread Report: According to SMM data, on July 18, the SMM ADC12 spot price showed a theoretical premium of 175 yuan/mt over the closing price of the most-traded cast aluminum alloy contract (AD2511) at 10:15.

Aluminum scrap: The spot primary aluminum price rose 130 yuan/mt from the previous trading day, with SMM A00 spot aluminum closing at 20,700 yuan/mt, and the overall aluminum scrap market followed the uptrend. In the short term, shredded aluminum tense scrap prices are expected to remain resilient with strong support from tight supply, fluctuating rangebound between 15,600-17,200 yuan/mt. Baled UBC faces persistent downward pressure due to weak off-season demand, with prices likely to test 15,000-15,500 yuan/mt.

Overseas market: Imported ADC12 CIF offers held steady at $2,460-2,490/mt, while import spot prices stabilized around 19,300 yuan/mt, with immediate import losses at approximately 900 yuan/mt. Local Thai ADC12 ex-VAT offers concentrated at 82-83 baht/kg.

Inventory: SMM data showed that on July 18, the daily social inventory of secondary aluminum alloy ingots in Foshan, Ningbo, and Wuxi totaled 28,420 mt, up 92 mt from the previous trading day and 3,107 mt WoW.

Summary: Aluminum prices extended gains further on Friday. Tight supply drove aluminum scrap prices higher, directly pushing up recycled aluminum raw material costs. Most secondary aluminum producers raised offers by 100 yuan/mt accordingly, with SMM ADC12 prices climbing 100 yuan/mt to 20,100 yuan/mt amid active market sentiment. However, actual consumption remained sluggish with tepid downstream procurement. Overall, while short-term scrap cost support for secondary aluminum prices is strengthening, weak demand coupled with high social inventory will limit upside room for ADC12 and other secondary aluminum alloy prices.

[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 use it to replace independent judgment. Any decisions made by clients are unrelated to SMM.]