Scrap Aluminum Remains Tight, Silicon Metal Sentiment Cools, ADC12 Holds Up Well [SMM Cast Aluminum Alloy Morning Comment]

SMM Cast Aluminum Alloy Morning Comment on 10.1

Futures: The most-traded cast aluminum alloy 2512 contract opened at 20,680 yuan/mt overnight, hit a high of 20,775 yuan/mt, and finally closed at the lowest of 20,620 yuan/mt, up 5 yuan/mt or 0.02% from the previous close. Trading volume was 2,085 lots, and open interest was 12,640 lots, mainly driven by an increase in long positions.   

Spot-Futures Price Spread Report: According to SMM data, on October 9, the theoretical premium of the SMM ADC12 spot price over the closing price of the most-traded cast aluminum alloy contract (AD2512) at 10:15 was 555 yuan/mt.

Warrant Report: On October 9, the total registered volume of cast aluminum alloy warrants was 35,003 mt, an increase of 1,841 mt from the previous trading day. Among them, the total registered volume in Shanghai was 4,303 mt, unchanged from the previous trading day; the total registered volume in Guangdong was 5,665 mt, an increase of 970 mt from the previous trading day; the total registered volume in Jiangsu was 8,619 mt, an increase of 598 mt from the previous trading day; the total registered volume in Zhejiang was 12,032 mt, an increase of 273 mt from the previous trading day; the total registered volume in Chongqing was 4,384 mt, unchanged from the previous trading day; the total registered volume in Sichuan was 0 mt, unchanged from the previous trading day.

Aluminum scrap side: Spot primary aluminum prices rose sharply yesterday compared to the previous trading day, with SMM A00 spot aluminum closing at 20,960 yuan/mt, and aluminum scrap market prices generally followed the increase. With more than half of the traditional peak season passed, tight supply remains the main theme in the aluminum scrap market, and procurement prices remain high, but the sustainability of these high levels needs to be considered. On the first day after the National Day holiday, A00 aluminum rose by 240 yuan/mt, with significant divergence in regional price adjustments. Areas such as Shanghai, Jiangsu, and Zhejiang followed the aluminum price increase, rising by 200-250 yuan/mt, while key secondary aluminum hubs like Henan, Anhui, Jiangxi, and Foshan maintained a somewhat reserved attitude toward the sustainability of the aluminum price rally, adjusting prices more cautiously, with yesterday's increase at 100-150 yuan/mt. Aluminum scrap prices are expected to hover at highs after the National Day holiday. On one hand, the tight supply fundamentals of aluminum scrap are difficult to alleviate in the short term, and the supporting effect of downstream pre-holiday stocking demand on prices continues to ferment. On the other hand, there has been no further feedback on the implementation of domestic tax cleanup policies, but in the long term, scrap utilization enterprises still have a psychological tendency to drive down prices. Overall, the mainstream price range for shredded aluminum tense scrap (priced based on aluminum content) is expected to fluctuate around 17,300-17,800 yuan/mt, while baled UBC prices are likely to hover around 15,600-16,100 yuan/mt. The market needs to closely monitor the sustainability of downstream stocking demand before the National Day holiday, the actual implementation pace of tax policies, and further guidance from primary aluminum price trends.

Silicon metal side: (1) Price: Market sentiment in the silicon metal market cooled down before and after the National Day holiday. On September 29-30, silicon metal futures prices declined. On September 30, the main continuous silicon metal futures contract SI2511 closed at 8,640 yuan/mt, down 320 yuan/mt or 3.6% from September 26. On October 9, the main continuous silicon metal futures contract closed at 8,640 yuan/mt, flat compared to the pre-holiday price. For silicon enterprises, after the holiday, affected by the decline in futures and buyers' sentiment to drive down prices, some silicon enterprises lowered their offers by around 100-200 yuan/mt compared to pre-holiday levels. (2) Production: In September 2025, domestic silicon metal production was 420,800 mt, an increase of 35,100 mt or 9.1% MoM, but a decrease of 33,300 mt or 7.3% YoY. From January to September 2025, cumulative silicon metal production was 3.0177 million mt, down 18.3% YoY. In October, the overall silicon metal production schedule continues to indicate an increase, with an expected MoM growth of 8.5%. (3) Inventory: According to SMM statistics, on October 9, social inventory of silicon metal in major regions totaled 545,000 mt, an increase of 2,000 mt from before the National Day holiday. This included 120,000 mt in general social warehouses, flat MoM from pre-holiday, and 425,000 mt in social delivery warehouses (including unregistered warrants and spot portions), up 2,000 mt from pre-holiday. (Excluding Inner Mongolia, Gansu, etc.)

Overseas market: Overseas ADC12 offers rose to $2,550–2,580/mt, while domestic spot prices increased by 200 yuan/mt to 20,200–20,500 yuan/mt, with import instant losses basically in the range of 200-400 yuan/mt. Local ADC12 offers in Thailand (excluding tax) rose to 83 baht/kg.

Inventory: According to SMM statistics, on October 9, social inventory of secondary aluminum alloy ingots in mainstream domestic consumption areas was 56,400 mt, an increase of 700 mt from September 25.

Summary: Yesterday, the SMM ADC12 price increased by 200 yuan/mt to 21,100 yuan/mt. Driven by stronger aluminum prices and tight supply of aluminum scrap, procurement costs for raw materials at secondary aluminum enterprises climbed, leading to collective increases in alloy ingot offers. Demand side, post-holiday market demand is gradually recovering, but downstream players mainly focus on digesting inventories or purchasing as needed, resulting in generally average overall transactions without significant volume increase. Inventory side, according to SMM statistics, on October 9, social inventory of secondary aluminum alloy ingots in mainstream domestic consumption areas was 56,400 mt, an increase of 700 mt from the week before the holiday, indicating a continued inventory buildup trend. Overall, the current supply-demand imbalance in the raw material segment remains unresolved, enterprises face significant procurement and cost pressures, coupled with steady and improving demand, providing upward momentum for prices; however, high and continuously rising social inventory may somewhat constrain the upside room for prices. In the short term, ADC12 prices are expected to maintain a relatively strong, fluctuating trend. Subsequent focus should be on tracking raw material circulation, social inventory change trends, and the pace of post-holiday downstream demand recovery.

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