Aluminum scrap and silicon metal weaken simultaneously, with spot ADC12 under pressure [SMM morning comment on cast aluminum alloy]

7.29 SMM Morning Comment on Cast Aluminum Alloy

Futures market: The most-traded cast aluminum alloy ad2511 contract opened at 20,050 yuan/mt overnight, hit a high of 20,090 yuan/mt and a low of 20,015 yuan/mt, and closed at 20,055 yuan/mt, up 30 yuan/mt or 0.15% from the previous close. Trading volume stood at 770 lots, with open interest at 9,016 lots, mainly due to bears reducing positions.

Spot-futures price spread report: According to SMM data, the spot price of SMM ADC12 showed a theoretical premium of 75 yuan/mt over the closing price of the most-traded cast aluminum alloy contract (AD2511) at 10:15 on July 28.

Aluminum scrap side: Spot primary aluminum fell 120 yuan/mt from the previous trading day on Monday, with SMM A00 spot aluminum closing at 20,660 yuan/mt. The aluminum scrap market generally followed the price movement. Baled UBC was quoted at 15,300-15,900 yuan/mt (ex-tax), while shredded aluminum tense scrap was quoted at 15,800-17,300 yuan/mt (ex-tax). For price differences between A00 aluminum and aluminum scrap, the spread for mechanical casting aluminum scrap in Shanghai narrowed by 12 yuan/mt WoW to 1,922 yuan/mt, while the spread for mixed aluminum extrusion scrap free of paint in Foshan also narrowed by 12 yuan/mt WoW to 1,912 yuan/mt. The aluminum scrap market is expected to remain in the doldrums this week, with the price center likely to return to off-season levels. Persistent bearish expectations for primary aluminum, coupled with weak off-season demand, continue to cap the overall upside potential for aluminum scrap, though tight raw material supply still provides medium and long-term bottom support.

Silicon metal side: On July 28, SMM non-oxygen blown #553 in east China fell 150 yuan/mt WoW to 9,600-9,800 yuan/mt, while oxygen-blown #553 dropped 150 yuan/mt WoW to 9,800-10,100 yuan/mt. Prices also declined in Kunming, Huangpu Port, Tianjin, north-west China, Xinjiang, and Shanghai. Prices held steady in Sichuan. Silicon (Si≥97%) prices also remained unchanged.

Overseas market: Overseas ADC12 offers were stable at $2,460-2,480/mt, while imported spot prices fell 100 yuan/mt to around 19,300 yuan/mt, with import losses widening slightly. Local ADC12 ex-tax offers in Thailand were concentrated at 82-83 baht/kg.

Inventory side: According to SMM statistics, the daily social inventory of secondary aluminum alloy ingots in Foshan, Ningbo, and Wuxi totaled 30,911 mt on July 28, up 605 mt from the previous trading day and 2,234 mt from the previous Monday.

Summary: SMM ADC12 prices fell 100 yuan/mt to 20,100 yuan/mt on Monday. Declines in aluminum and silicon prices drove down ADC12 costs, while reduced orders during the high-temperature off-season led to a 100 yuan/mt downward adjustment in offers. Overall, cost support remains, but high social inventory and sluggish demand are capping upside room. ADC12 prices are expected to fluctuate rangebound in the short term.

[Data source statement: Except for publicly available information, other data are derived from public information, market exchanges, and SMM's internal database model, processed by SMM for reference only and not constituting decision-making advice.]