In June, China imported 77,400 mt of unwrought aluminum alloy, with exports seeing a slight MoM increase [SMM Morning Comment on Cast Aluminum Alloy]

SMM Morning Comment on Cast Aluminum Alloy on July 22

Futures Market: Overnight, the most-traded AD2511 cast aluminum alloy futures contract opened at the lowest point of 20,125 yuan/mt. The futures market fluctuated upward, reaching a high of 20,250 yuan/mt, a new record high since its listing, and finally closed at 20,215 yuan/mt, up 50 yuan/mt or 0.25% from the previous trading day. Trading volume was 1,613 lots, and open interest was 9,750 lots, with bears reducing their positions.

Spot-Futures Price Spread Daily Report: According to SMM data, on July 21, 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 80 yuan/mt.

Industry Dynamics: (1) According to customs data, in June 2025, China's imports of unwrought aluminum alloy were 77,400 mt, down 12.3% YoY and 20.2% MoM. From January to June 2025, cumulative imports were 542,300 mt, down 11.6% YoY. In June 2025, China's exports of unwrought aluminum alloy were 25,800 mt, up 23.8% YoY and 6.6% MoM. From January to June 2025, cumulative exports were 120,300 mt, up 3.1% YoY. (2) According to customs data, in June 2025, China's domestic aluminum scrap imports were approximately 155,600 mt, down about 2.6% YoY. In terms of import source countries, Thailand, the UK, Japan, the US, and other countries and regions were the main sources of domestic aluminum scrap imports in June, with Thailand accounting for 25.9% of the total domestic imports.

Aluminum Scrap: On Monday, the spot price of primary aluminum rose by 190 yuan/mt from the previous trading day. SMM A00 spot aluminum closed at 20,890 yuan/mt, and the overall aluminum scrap market followed the rise. Baled UBC aluminum scrap was concentratedly quoted at 15,450-15,950 yuan/mt (tax not included), and shredded aluminum tense scrap was concentratedly quoted at 16,000-17,500 yuan/mt (tax not included). It is expected that the aluminum scrap market this week may fluctuate at highs along with aluminum prices, with overall prices more likely to rise than fall. Undersupply of raw materials will provide medium and long-term support for aluminum scrap prices, but weak demand in the off-season will also continue to constrain upside room. Shredded aluminum tense scrap is strongly supported by tight supply, with price resilience remaining, and is expected to fluctuate rangebound within 15,600-17,200 yuan/mt. Baled UBC aluminum scrap is constrained by weak demand in the off-season, with continued downward pressure, and its price trend will closely follow aluminum price fluctuations, with an average price range of 15,300-15,800 yuan/mt.

Overseas Market: The CIF import price of ADC12 slightly remained at 2,460-2,490 US dollars/mt, the import spot price rose to around 19,500 yuan/mt, and the immediate import loss narrowed slightly. The local ADC12 price in Thailand, excluding tax, was concentrated at 82-83 Thai baht/kg.

Inventory: According to SMM statistics, on July 21, the daily social inventory of secondary aluminum alloy ingots in Foshan, Ningbo, and Wuxi totaled 28,677 mt, up 257 mt from the previous trading day and 1,997 mt from the previous Monday.

Summary: On Monday, the SMM ADC12 price rose by 100 yuan/mt to 20,200 yuan/mt. The continuous uptrend in aluminum prices drove widespread increases in aluminum scrap prices, further pushing up ADC12 costs, with strong market willingness to adjust prices, generally raising them by 100-200 yuan/mt. However, actual consumption showed mediocre performance, with limited transactions. Overall, the cost support from aluminum scrap for secondary aluminum prices strengthened in the short term, but weak demand coupled with high social inventory will constrain the upside room for ADC12 and other secondary aluminum alloy prices, which are expected to maintain a narrow-range, strong performance in the near term.

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