U.S.-China Tariff Conflict Intensifies, Cast Aluminum Alloy's Most-Traded Contract Closed Lower Under Pressure on Friday [SMM Cast Aluminum Alloy Morning Comment]

SMM Cast Aluminum Alloy Morning Comment on Oct. 13

Futures: On Friday night, the most-traded cast aluminum alloy AD2512 futures contract opened at 20,560 yuan/mt, hit a high of 20,630 yuan/mt, and finally closed at the lowest point of 20,370 yuan/mt, down 170 yuan/mt or 0.83% from the previous closing price. Trading volume was 3,664 lots, and open interest was 12,862 lots, with bears mainly increasing positions.

Spot-Futures Price Spread Report: According to SMM data, on Oct. 10, the theoretical premium of SMM ADC12 spot price over the most-traded cast aluminum alloy futures contract (AD2512) closing price at 10:15 was 505 yuan/mt.

Warrant Report: On Oct. 10, the total registered volume of cast aluminum alloy warrants was 39,434 mt, an increase of 4,431 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 9,128 mt, an increase of 3,463 mt from the previous trading day; the total registered volume in Jiangsu was 8,711 mt, an increase of 92 mt from the previous trading day; the total registered volume in Zhejiang was 12,578 mt, an increase of 546 mt from the previous trading day; the total registered volume in Chongqing was 4,714 mt, an increase of 330 mt from the previous trading day; the total registered volume in Sichuan was 0 mt, unchanged from the previous trading day.

Aluminum Scrap: On Friday, spot primary aluminum prices rose slightly compared to the previous trading day, with SMM A00 spot aluminum closing at 20,980 yuan/mt, and aluminum scrap market prices generally increased. With the traditional peak season more than half over, tight supply in the aluminum scrap market remains the main theme, procurement prices remain high, but the sustainability of high levels needs to be considered. Baled UBC was quoted in a range of 15,850-16,450 yuan/mt (ex-tax), shredded aluminum tense scrap (priced based on aluminum content) was quoted in a range of 17,500-18,000 yuan/mt (ex-tax). Baled UBC rose 150 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 WoW. On the day after the National Day holiday, key secondary aluminum hubs such as Anhui, Jiangxi, and Foshan saw price increases of 100-150 yuan/mt, following yesterday's A00 gains to further push up aluminum scrap quotations. SMM comprehensively judges that the overall aluminum scrap market prices in October will still hold up well, with the mainstream price range for shredded aluminum tense scrap (priced based on aluminum content) expected to hover around 17,500-18,000 yuan/mt. The market needs to closely monitor the sustainability of post-holiday downstream demand and further guidance from primary aluminum price trends.

Silicon Metal: On Friday, SMM oxygen-blown #553 silicon in east China was at 9,400-9,500 yuan/mt, #441 silicon was at 9,600-9,700 yuan/mt. In the futures market, the most-traded silicon metal futures contract closed at 8,685 yuan/mt on Friday, showing little change WoW from before the holiday. The silicon metal market saw a tug-of-war between longs and shorts, with silicon prices fluctuating.

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 the immediate import loss basically in the range of 200-400 yuan/mt. The local tax-exempt ADC12 price in Thailand rose to 83 Thai baht/kg.

Inventory side: According to SMM statistics, on October 13, the combined daily social inventory of secondary aluminum alloy ingots in Foshan, Ningbo, and Wuxi totaled 49,157 mt, down 703 mt from the previous trading day.

Summary: On the macro front, renewed China-US trade tensions put pressure on nonferrous futures. Fundamentally, last week, driven by tight supply and rising prices, aluminum scrap prices increased significantly, and with cost support, secondary aluminum enterprises showed strong pricing sentiment. Post-holiday demand gradually recovered, but downstream buyers mainly focused on digesting inventories or purchasing as needed, resulting in overall moderate transactions. Currently, the raw material side maintains an undersupply pattern, and enterprises face significant procurement and cost pressures; meanwhile, steady and improving demand provides upward support for prices; however, continuously rising social inventories exert some downward pressure, and ADC12 prices are expected to maintain a fluctuating trend in the short term. Going forward, key factors to watch include raw material supply conditions, changes in social inventories, and the pace of post-holiday 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, for reference only and not as decision-making advice.]