Overnight, the most-traded cast aluminum alloy contract closed lower, while tight aluminum scrap supply supported ADC12. [SMM Cast Aluminum Alloy Morning Comment]

9.9 SMM Cast Aluminum Alloy Morning Comment

Futures: The most-traded cast aluminum alloy ad2511 contract opened at 20,295 yuan/mt overnight, hit a high of 20,330 yuan/mt, and closed at the day's low of 20,200 yuan/mt, down 95 yuan/mt (0.47%) from the previous close. Trading volume stood at 288 lots, with open interest at 7,769 lots, mainly driven by short position increases.

Spot-Futures Price Spread Report: According to SMM data, the theoretical premium of SMM ADC12 spot price over the most-traded cast aluminum alloy contract (AD2511) 10:15 am closing price was 465 yuan/mt on September 8.

Aluminum scrap: Spot primary aluminum prices edged up MoM on Monday, with SMM A00 spot aluminum closing at 20,680 yuan/mt, while aluminum scrap market prices remained generally stable. Baled UBC rose 100 yuan/mt WoW, while shredded aluminum tense scrap (priced based on aluminum content), scrap wheel hub, and mechanical casting aluminum scrap held steady from the previous trading day. Recent significant price adjustments in some regions stemmed from unverified policy implementation rumors exacerbating supply shortages, forcing some scrap utilization enterprises to raise raw material recycling prices to maintain production. Aluminum scrap prices are expected to hover at highs this week amid intensified tug-of-war between sellers and buyers. Macro perspective, the ongoing nationwide crackdown on illegal tax rebates will profoundly reshape the cost structure of the secondary aluminum industry. Although scrap utilization enterprises' purchasing quotes haven't yet reflected actual policy impacts during this transition period, industry uncertainty continues mounting. Long-term, downstream scrap users may further bargain down purchasing prices to offset potential tax cost increases, keeping downside risks for aluminum scrap prices. However, tight supply conditions, especially for shredded aluminum tense scrap, will sustain suppliers' pricing power in the near term.

Silicon metal: On September 8, SMM oxygen-blown #553 silicon in east China traded at 9,000-9,200 yuan/mt, flat from last Friday, while #441 silicon held steady at 9,300-9,500 yuan/mt. In futures, prices moved downwards after a higher opening on Monday, with the session opening at 8,740 yuan/mt, hitting lows of 8,440 yuan/mt and highs of 8,750 yuan/mt before settling at 8,530 yuan/mt, down 290 yuan/mt WoW. Warrant data from GFEX showed industrial silicon warrants totaled 49,922 lots on September 8, down 50 lots from the previous working day.

Overseas market: Current overseas ADC12 offers range between $2,500-2,530/mt, with import parity maintained around 300 yuan/mt; Thailand's domestic ADC12 ex-VAT quotes temporarily stand at 83-84 baht/kg.

Inventory: SMM statistics indicate the daily social inventory of secondary aluminum alloy ingots across Foshan, Ningbo, and Wuxi totaled 34,877 mt on September 9, up 70 mt from the previous day and 1,097 mt from last Tuesday (September 2).

Summary: Aluminum prices fluctuated rangebound, while the secondary aluminum market remained generally stable, with most quotations holding flat. Currently, aluminum scrap supply is tight, and enterprise procurement costs have increased, providing support for ADC12 prices. Downstream consumption is showing a slow recovery, but enterprise order increments are limited, and the peak season effect has not yet fully materialized. It is expected that ADC12 prices will hover at highs in the short term due to cost support, but upside room is constrained by sluggish demand recovery and increasing social inventory. Subsequent attention should focus on raw material supply conditions, the pace of demand recovery, and policy guidance.

[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, for reference only and not constituting decision-making advice.]