9.1 SMM Cast Aluminum Alloy Morning Comment
Futures: The most-traded cast aluminum alloy AD2511 contract opened at 20,325 yuan/mt overnight, with the highest at 20,380 yuan/mt and the lowest at 20,325 yuan/mt, finally closed at 20,340 yuan/mt, up 35 yuan/mt or 0.17% from the previous close. The trading volume was 662 lots, and the open interest stood at 7,914 lots, mainly driven by long position increases.
Spot-Futures Price Spread Report: According to SMM data, on September 9, the spot price of SMM ADC12 showed a theoretical premium of 510 yuan/mt against the closing price of the most-traded cast aluminum alloy contract (AD2511) at 10:15 am.
Aluminum scrap: On Tuesday, spot primary aluminum prices rose from the previous trading day, with SMM A00 spot aluminum closing at 20,770 yuan/mt, and aluminum scrap prices followed the upward trend. As the traditional peak season begins, orders at some downstream scrap utilization enterprises recovered. However, tight supply remains the dominant theme in the aluminum scrap market, keeping procurement prices high. Baled UBC rose 50 yuan/mt WoW, while shredded aluminum tense scrap (priced based on aluminum content), scrap wheel hub, and mechanical casting aluminum scrap increased 100 yuan/mt from the previous trading day. Following last week's significant adjustments in aluminum tense scrap recycling prices in Jiangxi, Hunan also raised quotations over the past two days, with a cumulative increase of 400 yuan/mt. Recent substantial price adjustments in some regions stem from unconfirmed policy implementation, exacerbating supply shortages and forcing some scrap utilization enterprises to raise raw material recycling prices to maintain production. The market should closely monitor the progress of tax policy implementation and the actual recovery of consumption during the September peak season, as price trends will depend on the interplay between cost transmission and supply tightness.
Silicon metal: Trading activity in the silicon metal spot market remained sluggish. Oxygen-blown #553 silicon in east China was quoted at 9,000-9,200 yuan/mt yesterday, while #441 silicon traded at 9,300-9,500 yuan/mt. Some traders' high offers were difficult to transact. In the futures market, prices fluctuated significantly during the day. The most-traded contract first surged then plunged sharply after 2 pm, reaching an intraday high of 8,620 yuan/mt and a low of 8,385 yuan/mt, finally closing at 8,410 yuan/mt, down 120 yuan/mt from the previous day.
Overseas market: Current overseas ADC12 offers are in the range of $2,500-2,530/mt, with import premiums hovering around 300 yuan/mt. Local ADC12 ex-VAT quotations in Thailand temporarily stand at 83-84 baht/kg.
Inventory: According to SMM statistics, the daily social inventory of secondary aluminum alloy ingots in Foshan, Ningbo, and Wuxi totaled 34,881 mt on September 10, up 5 mt from the previous trading day and 954 mt from last Wednesday (September 3).
Summary: Aluminum prices rebounded for three consecutive days, driving rapid follow-up increases in aluminum scrap prices, with the market rising by 100 yuan/mt. Driven by cost increases, secondary aluminum producers generally raised their offers by 100 yuan/mt, with strong willingness to adjust prices in the market. Since entering September, downstream consumption has shown a mild recovery trend, with demand continuously improving, though the characteristics of the traditional peak season have not yet fully emerged. In the short term, ADC12 prices are expected to hover at highs supported by costs, but limited by the moderate pace of demand recovery and factors such as increasing social inventory, further upside room for prices may be constrained. The market needs to closely monitor the supply situation of raw materials, the pace of demand recovery, and the impacts of policy changes going forward.
[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.]
