Overnight, the most-traded cast aluminum alloy contract rose slightly by 0.20%, with bulls increasing positions dominating the futures [SMM Cast Aluminum Alloy Morning Comment]

9.11 SMM Cast Aluminum Alloy Morning Comment

Futures: The most-traded cast aluminum alloy ad2511 contract opened at 20,355 yuan/mt overnight, hitting a high of 20,425 yuan/mt and a low of 20,340 yuan/mt, and closed at 20,405 yuan/mt, up 40 yuan/mt, or 0.20%, from the previous close. Trading volume was 1,412 lots, and open interest was 4,091 lots, with the increase mainly driven by bulls.   

Spot-Futures Price Spread Report: According to SMM data, on September 10, the theoretical premium of SMM ADC12 spot price to the most-traded cast aluminum alloy contract (AD2511) at the 10:15 closing price was 535 yuan/mt.

Aluminum Scrap: On Wednesday, spot primary aluminum prices saw a slight correction from the previous trading day, with SMM A00 spot closing at 20,750 yuan/mt, while aluminum scrap market prices held steady overall. As the traditional peak season begins, orders at some downstream scrap utilization enterprises recovered, but tight supply remains the main theme in the aluminum scrap market, keeping procurement prices high. Today, baled UBC was mainly offered at 15,550-16,050 yuan/mt (tax excluded), and shredded aluminum tense scrap (priced based on aluminum content) was mainly offered at 17,300-17,800 yuan/mt (tax excluded). Baled UBC, shredded aluminum tense scrap (priced based on aluminum content), scrap wheel hub, and mechanical casting aluminum scrap were flat WoW. Following last week's significant adjustment in aluminum tense scrap recycling prices in Jiangxi, Hunan also raised offers this week, with a cumulative increase of 400 yuan/mt. SMM expects that the mainstream range for shredded aluminum tense scrap (priced based on aluminum content) will hover around 17,200-17,700 yuan/mt, while baled UBC prices, supported by rigid demand, will fluctuate between 15,500-16,000 yuan/mt. The market needs to 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: On September 10, SMM east China non-oxygen blown #553 was at 8,900-9,000 yuan/mt; oxygen-blown #553 at 9,000-9,200 yuan/mt; #521 at 9,200-9,400 yuan/mt; #441 at 9,300-9,500 yuan/mt; #421 at 9,300-9,500 yuan/mt; #421 for silicone use at 9,600-10,100 yuan/mt; #3303 at 10,200-10,400 yuan/mt. Individual silicon prices in Huangpu Port and Tianjin were lower. Prices in Kunming, Sichuan, Xinjiang, Northwest China, and Shanghai held steady. Silicon (Si≥97%) prices also held steady today.

Overseas Market: Current overseas ADC12 offers are in the range of 2,500-2,530 USD/mt, with import arbitrage maintained at around 300 yuan/mt; local ADC12 tax-excluded offers in Thailand are temporarily at 83-84 THB/kg.

Inventory: According to SMM statistics, on September 10, the daily social inventory of secondary aluminum alloy ingots in Foshan, Ningbo, and Wuxi totaled 34,881 mt, up 5 mt from the previous trading day and up 954 mt from last Wednesday (September 3).

Summary: Aluminum prices adjusted narrowly yesterday, with the market largely holding steady and adopting a wait-and-see approach. Since the beginning of September, downstream consumption has shown a mild recovery trend, with demand continuing to improve, though the characteristics of a traditional peak season have not yet fully emerged. In the short term, ADC12 prices are expected to hover at highs, supported by costs, but further upside room may be limited due to factors such as the modest pace of demand recovery and an increase in social inventory. Going forward, the market needs to closely monitor raw material supply conditions, the pace of demand recovery, and the impact of policy changes.

[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.]