Overnight, cast aluminum alloy closed slightly higher, with short-term macro factors providing bullish support to drive up prices [SMM morning comment on cast aluminum alloy]

Published: Jul 23, 2025 09:14

Save

[SMM Morning Comment on Cast Aluminum Alloy: Cast aluminum alloy closed slightly higher overnight, supported by short-term macroeconomic tailwinds] On Wednesday, the price of SMM ADC12 rose by 50 yuan/mt to 20,250 yuan/mt. The recent continuous rise in aluminum prices has driven aluminum scrap prices to generally follow suit, further pushing up the cost of ADC12 and igniting market sentiment for price adjustments. However, actual consumption has shown mediocre performance, with limited transactions. Overall, the support from aluminum scrap costs for secondary aluminum prices has strengthened in the short term, but weak demand coupled with high social inventory will constrain the upside room for prices of secondary aluminum alloys such as ADC12. It is expected that they will maintain a narrow and relatively strong trend in the short term.

7.23 SMM Cast Aluminum Alloy Morning Comment

Futures market: Overnight, the most-traded cast aluminum alloy ad2511 contract opened at 20,300 yuan/mt, peaked at 20,350 yuan/mt, bottomed at 20,265 yuan/mt, and closed at 20,290 yuan/mt, up 10 yuan/mt (0.05%) from the previous trading day. Trading volume stood at 1,296 lots, open interest at 9,907 lots, with bears dominating position reductions.

Spot-futures price spread report: According to SMM data, on July 22, the spot price of SMM ADC12 showed a theoretical premium of 115 yuan/mt over the closing price of the most-traded cast aluminum alloy contract (AD2511) at 10:15 am.

Aluminum scrap side: On Tuesday, spot primary aluminum prices rose 50 yuan/mt from the previous trading day, with SMM A00 spot aluminum closing at 20,940 yuan/mt. The aluminum scrap market broadly followed the uptrend. Yesterday, baled UBC was quoted at 15,500-16,000 yuan/mt (tax excluded), shredded aluminum tense scrap at 16,000-17,500 yuan/mt (tax excluded). Regionally, Shanghai, Jiangsu, and Shandong closely tracked aluminum price movements with adjustments of 50-100 yuan/mt, while Guizhou, Hunan, and Anhui lagged behind with flat quotes amid growing fear of high prices. Price difference between A00 aluminum and aluminum scrap: The Foshan price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint widened by 50 yuan/mt to 1,956 yuan/mt, while the Shanghai price difference between A00 aluminum and mechanical casting aluminum scrap narrowed by 4 yuan/mt to 1,932 yuan/mt.

Overseas market: Import ADC12 CIF quotes remained stable at $2,460-2,490/mt. Import spot prices rose to around 19,500 yuan/mt, coupled with RMB appreciation, narrowing import losses further. Thailand's domestic ADC12 tax-exclusive quotes concentrated at 82-83 baht/kg.

Inventory side: SMM data showed that on July 22, the combined daily social inventory of secondary aluminum alloy ingots in Foshan, Ningbo, and Wuxi totaled 28,777 mt, up 100 mt from the previous trading day and 1,184 mt WoW.

Conclusion: On Wednesday, SMM ADC12 prices rose 50 yuan/mt to 20,250 yuan/mt. Recent sustained aluminum price increases drove broad-based scrap aluminum rallies, further elevating ADC12 production costs and fueling market adjustment sentiment. However, actual consumption showed mediocre performance with limited transactions. Overall, while scrap aluminum costs strengthened short-term support for secondary aluminum prices, weak demand coupled with high social inventories will constrain upside room for ADC12 and other secondary aluminum alloys, which are expected to maintain a narrowly strong trend in the near term.

[Data source statement: Except for publicly available information, other data are derived from public information, market exchanges, and SMM's internal database models for processing purposes, serving as references only without constituting decision-making advice.]

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

For any inquiries or to learn more information, please contact: lemonzhao@smm.cn

For more information on how to access our research reports, please contact:service.en@smm.cn

Related News

21 hours ago

Fed Governor Milan Pushes for Over 100 Basis Points Cut, Contradicts Barkin on Caution

Federal Reserve Governor Milan pointed out that it is necessary for the US Fed to cut interest rates by more than 100 basis points this year. At the same time, he is very much looking forward to the performance of Kevin Warsh as Fed Chairman. However, Richmond Fed President Barkin emphasized that monetary policy must remain cautious until inflation fully pulls back to the target level, thereby ensuring the stability of the labour market.

21 hours ago

Democratic Senators Demand Delay in Fed Nomination Amid Criminal Investigation

All 11 Democratic members of the US Senate Banking Committee jointly sent a letter to the committee's chairman, Tim Scott, requesting that all nomination processes for the prospective Fed Chairman, Kevin Warsh, be postponed until the criminal investigation into current Fed Chairman Powell and other board members is concluded. However, Scott stated that Warsh's confirmation was a done deal.

21 hours ago

Fed to Keep Large Banks' Capital Levels Unchanged, Postpones Stress Test Reforms Until 2027

The US Fed has announced that it will maintain the capital levels of large banks unchanged during the upcoming stress test cycle (corresponding to the 2026 cycle). At the same time, the US Fed is planning multidimensional reforms to this annual test, aiming to enhance its transparency. The US Fed's Vice Chair for Supervision, Bowman, revealed that adjustments to the stress capital buffer requirements for large banks will be postponed until 2027. This move is intended to provide the US Fed with sufficient time to evaluate potential flaws that may be exposed in its testing models when assessing banks' financial conditions under simulated economic downturn scenarios.

21 hours ago