Futures Prices Fluctuate Rangebound, ADC12 Stabilizes Temporarily Under Cost Support [SMM Cast Aluminum Alloy Morning Comment]

8.19 SMM Cast Aluminum Alloy Morning Comment

Futures: The most-traded cast aluminum alloy contract AD2511 opened at the highest point of 20,100 yuan/mt, hit a low of 20,025 yuan/mt, and finally closed at 20,085 yuan/mt, down 5 yuan/mt or 0.02% from the previous close. Trading volume was 448 lots, with open interest at 7,995 lots, mainly due to an increase in short positions.

Daily Basis Report: According to SMM data, on August 18, the theoretical premium of SMM ADC12 spot price over the closing price of the most-traded cast aluminum alloy contract (AD2511) at 10:15 am was 330 yuan/mt.

Aluminum Scrap: On Monday, the spot primary aluminum price decreased by 160 yuan/mt compared to the previous trading day, with SMM A00 spot closing at 20,550 yuan/mt, leading to a general decline in the scrap aluminum market. Baled UBC prices were concentrated at 15,400-15,900 yuan/mt (excluding tax), while shredded aluminum tense scrap (priced based on aluminum content) prices were concentrated at 17,100-17,600 yuan/mt (excluding tax). Baled UBC prices fell 100 yuan/mt WoW, while shredded aluminum tense scrap (priced based on aluminum content) and wheel hub prices remained unchanged WoW. In terms of the price difference between A00 aluminum and aluminum scrap, the Foshan mixed aluminum extrusion scrap free of paint saw a narrowing of 160 yuan/mt WoW to 1,762 yuan/mt, while the Shanghai mechanical casting aluminum scrap spread widened by 29 yuan/mt WoW to 1,974 yuan/mt. It is expected that the scrap aluminum market will fluctuate at highs this week. Affected by the transitional period of relevant policies for secondary aluminum, raw material purchase prices are likely to rise, with shredded aluminum tense scrap (priced based on aluminum content) resources becoming tighter, and the operating range is expected to fluctuate at 17,100-17,600 yuan/mt (excluding tax); baled UBC, supported by downstream can stock consumption, is expected to operate within the range of 15,500-16,000 yuan/mt (excluding tax).

Silicon Metal: On August 18, SMM east China non-oxygen blown #553 was priced at 9,100-9,300 yuan/mt; oxygen-blown #553 at 9,300-9,500 yuan/mt; #521 at 9,500-9,700 yuan/mt; #441 at 9,600-9,800 yuan/mt; #421 at 9,600-9,900 yuan/mt; #421 for silicone use at 10,200-10,600 yuan/mt; and #3303 at 10,700-10,900 yuan/mt. Some silicon prices in Tianjin increased. Prices in Kunming, Huangpu Port, Northwest, Shanghai, Xinjiang, and Sichuan regions remained stable.

Overseas Market: Currently, overseas ADC12 quotes have risen to the range of 2,470-2,500 USD/mt, with domestic import spot prices holding steady around 19,700 yuan/mt, leading to a further widening of immediate import losses; Thailand's local ADC12 prices (excluding tax) were concentrated at 82-84 Thai baht/kg.

Inventory: According to SMM statistics, on August 19, the daily social inventory of secondary aluminum alloy ingots in Foshan, Ningbo, and Wuxi totaled 31,432 mt, a decrease of 221 mt from the previous trading day and 41 mt from last Tuesday (August 12).

Summary: Due to recent policy adjustments in some regions and tight supply of scrap aluminum, the decline in raw material costs is limited, supporting companies in maintaining firm quotations. The SMM ADC12 price remains stable at 20,350 yuan/mt. Demand side, the traditional off-season atmosphere persisted, with sluggish improvement in actual consumption and mediocre performance in transactions. In the short term, cost support and policy fluctuations may continue to underpin prices, but weak demand coupled with inventory buildup pressure will limit upside room. Subsequent focus should be on policy implementation and the recovery pace of peak-season demand.

[Data source statement: Other data beyond publicly available information are derived from public information, market exchanges, and processed by SMM based on its internal database model, for reference only and not constituting decision-making advice.]