The most-traded contract edges down slightly, with aluminum scrap support and weak demand in a tug-of-war [SMM Morning Comment on Cast Aluminum Alloy]

SMM Morning Comment on Cast Aluminum Alloy on July 31

Futures Market: Overnight, the most-traded AD2511 cast aluminum alloy futures contract opened at 20,090 yuan/mt, with a high of 20,095 yuan/mt, a low of 20,005 yuan/mt, and closed at 20,040 yuan/mt, down 30 yuan/mt or 0.15% from the previous close. Trading volume stood at 512 lots, with open interest at 8,788 lots, mainly due to bulls reducing their positions.    

Spot-Futures Price Spread Daily Report: According to SMM data, on July 30, the SMM ADC12 spot price was at a theoretical premium of 45 yuan/mt over the closing price of the most-traded cast aluminum alloy futures contract (AD2511) at 10:15 a.m.

Aluminum Scrap: On Wednesday, the spot price of primary aluminum saw a slight correction of 50 yuan/mt from the previous trading day. SMM A00 spot aluminum closed at 20,670 yuan/mt, with the aluminum scrap market remaining generally stable. Baled UBC aluminum scrap was quoted at 15,300-15,900 yuan/mt (tax excluded), while shredded aluminum tense scrap was quoted at 15,800-17,300 yuan/mt (tax excluded). Regionally, Shanghai, Jiangsu, Shandong, and other regions closely followed aluminum price movements, with price adjustments ranging from 0 to 50 yuan/mt. Jiangxi, Foshan, Hunan, Guizhou, and other regions lagged behind aluminum price movements, with quoted prices remaining unchanged MoM. In Hubei, the prices of all types of aluminum tense scrap and wrought aluminum alloy scrap increased by 100 yuan/mt, with price adjustments being delayed. Regarding the price difference between A00 aluminum and aluminum scrap, in Shanghai, the price difference between A00 aluminum and mechanical casting aluminum scrap narrowed by 4 yuan/mt MoM to 1,932 yuan/mt. In Foshan, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint narrowed by 60 yuan/mt MoM to 1,922 yuan/mt.

Silicon Metal: On July 30, SMM east China non-oxygen blown #553 silicon metal was priced at 9,700-9,800 yuan/mt; oxygen-blown #553 at 9,900-10,100 yuan/mt; #521 at 10,000-10,300 yuan/mt; #441 at 10,100-10,300 yuan/mt; #421 at 10,100-10,400 yuan/mt; #421 silicone at 10,300-10,600 yuan/mt; and #3303 at 10,800-11,000 yuan/mt. Silicon metal prices in Kunming, Huangpu Port, Tianjin, north-west China, Xinjiang, Sichuan, and Shanghai rose simultaneously.

Overseas Market:

Inventory: According to SMM statistics, on July 30, the daily social inventory of secondary aluminum alloy ingots in Foshan, Ningbo, and Wuxi totaled 31,227 mt, up 291 mt from the previous trading day and 2,147 mt from Wednesday of the previous week.

Summary: Yesterday, aluminum prices rebounded slightly, with the secondary aluminum market maintaining a stable pattern. SMM ADC12 prices remained stable at 20,100 yuan/mt. Recently, end-use consumption has been sluggish, with actual trading remaining sluggish amid weak demand. However, the sustained high purchase prices of aluminum scrap have provided support for prices. Overall, cost support will continue to limit the downside room for prices, while high social inventory and persistently sluggish actual demand will suppress the upside room. The ADC12 price is expected to maintain a fluctuate rangebound pattern in the short term.

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