July aluminum alloy imports saw a significant YoY decline, while aluminum scrap imports continued to grow [SMM Cast Aluminum Alloy Morning Comment]

8.21 SMM Cast Aluminum Alloy Morning Comment

Futures: The most-traded AD2511 contract for cast aluminum alloy opened at 20,090 yuan/mt, with the lowest point at 20,075 yuan/mt and the highest point also at 20,075 yuan/mt. It finally closed at 20,090 yuan/mt, up 15 yuan/mt or 0.07% from the previous close. Trading volume was 420 lots, and open interest was 7,933 lots, mainly due to increased long positions.

Spot-Futures Price Spread Daily Report: According to SMM data, on August 20, the theoretical premium of SMM ADC12 spot price over the closing price of the most-traded AD2511 futures contract at 10:15 am expanded to 340 yuan/mt.

Industry Updates: (1) Aluminum Scrap Imports: According to the latest customs data, domestic aluminum scrap imports in July 2025 were approximately 160,500 mt, up 18.4% YoY. In terms of import sources, the main countries and regions for aluminum scrap imports in July 2025 were Thailand, the UK, Japan, and the US, among which Thailand accounted for 25.5% of total imports. (2) Unwrought Aluminum Alloy Imports and Exports: Customs data showed that unwrought aluminum alloy imports in July 2025 were 69,200 mt, down 28.4% YoY and 10.6% MoM. Cumulative imports from January to July 2025 were 611,500 mt, down 13.9% YoY. Unwrought aluminum alloy exports in July 2025 were 24,900 mt, up 38.3% YoY but down 3.3% MoM. Cumulative exports from January to July 2025 were 145,200 mt, up 7.8% YoY.

Aluminum Scrap: On Wednesday, the spot price of primary aluminum decreased by 70 yuan/mt compared to the previous trading day. SMM A00 spot closed at 20,520 yuan/mt, and the overall aluminum scrap market prices declined. Baled UBC prices fell 50 yuan/mt MoM, while shredded aluminum tense scrap (priced based on aluminum content) and wheel hub prices remained unchanged. In Anhui, the prices of raw aluminum series collectively rose 100 yuan/mt, and the difficulty in purchasing aluminum scrap continued to increase. In terms of the price difference between A00 aluminum and aluminum scrap, the Foshan mixed aluminum extrusion scrap free of paint narrowed by 70 yuan/mt to 1,742 yuan/mt, and the Shanghai mechanical casting aluminum scrap spread narrowed slightly by 16 yuan/mt to 1,998 yuan/mt. It is expected that the aluminum scrap market prices will fluctuate at highs this week.

Silicon Metal: On August 20, the silicon metal market prices declined. The main continuous futures contract opened low and closed lower, opening at 8,500 yuan/mt, with a high of 8,510 yuan/mt and a low of 8,180 yuan/mt, closing at 8,390 yuan/mt, down 250 yuan/mt from the previous day. The spot market followed the decline, with downstream alloy plants purchasing #553 silicon at around 8,900-9,000 yuan/mt.

Overseas Market: Currently, overseas ADC12 quotes have risen to the range of $2,470-2,500/mt, while domestic import spot prices remain stable at around 19,700 yuan/mt, with immediate import losses widening again; Thai local ADC12 tax-excluded quotes are concentrated at 82-84 baht/kg.

Inventory: According to SMM statistics, as of August 20, the combined daily social inventory of secondary aluminum alloy ingots in Foshan, Ningbo, and Wuxi totaled 31,596 mt, up 164 mt from the previous trading day but down 16 mt from Wednesday last week (August 13).

Summary: Aluminum prices pulled back slightly yesterday, while the SMM ADC12 price held steady at 20,350 yuan/mt. Currently, aluminum scrap supply remains tight, leading to a slower decline in aluminum scrap prices, and high raw material costs continue to support secondary aluminum alloy prices. In addition, recent news of tax rebate cancellations in multiple regions of Anhui and Jiangxi has prompted companies to maintain firm offers in response to rising cost pressures. Demand side, the traditional off-season sentiment persists, with sluggish improvement in actual consumption and mediocre transaction performance. In the short term, cost support and policy disruptions may continue to underpin prices, but weak demand coupled with inventory buildup pressure will limit upside room. Going forward, close attention should be paid to the implementation of policies and the recovery pace of demand in the peak season.

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