Short-Term Cast Aluminum Alloy Fluctuation Pattern Hard to Change, Focus on Breakthrough Momentum at 20,500 Yuan/mt [SMM Cast Aluminum Alloy Morning Comment]

10.16 SMM Cast Aluminum Alloy Morning Comment

Futures: The most-traded cast aluminum alloy AD2512 contract opened at 20,395 yuan/mt overnight, hit a high of 20,425 yuan/mt, bottomed at 20,365 yuan/mt, and finally closed at 20,425 yuan/mt, up 15 yuan/mt or 0.07% from the previous close. Trading volume was 938 lots, and open interest was 13,315 lots, with bears mainly reducing positions. Technically, the moving averages are in a bullish arrangement, the MACD red bars continue, and bears are reducing positions, supporting the price to stabilize temporarily; however, trading volume shrank, and it is necessary to monitor whether subsequent volume can cooperate for a breakthrough (such as holding above 20,500 yuan/mt). If volume is insufficient, it may maintain a sideways movement.

Basis Daily Report: According to SMM data, on October 15, the theoretical premium of the SMM ADC12 spot price to the most-traded cast aluminum alloy contract (AD2512) 10:15 closing price was 590 yuan/mt.

Warrant Daily Report: On October 15, the total registered volume of cast aluminum alloy warrants was 42,444 mt, a decrease of 122 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 10,367 mt, unchanged from the previous trading day; the total registered volume in Jiangsu was 8,470 mt, a decrease of 122 mt from the previous trading day; the total registered volume in Zhejiang was 14,290 mt, unchanged from the previous trading day; the total registered volume in Chongqing was 5,014 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: On Wednesday, spot primary aluminum prices rose slightly from the previous trading day, with the SMM A00 spot price closing at 20,920 yuan/mt, while aluminum scrap market prices were generally flat. Baled UBC scrap was quoted at 15,850-16,350 yuan/mt (ex-tax), and shredded aluminum tense scrap (priced based on aluminum content) was quoted at 17,300-17,800 yuan/mt (ex-tax). Baled UBC, shredded aluminum tense scrap (priced based on aluminum content), scrap wheel hub, and mechanical casting aluminum scrap were flat MoM. Different views emerged on the subsequent trend of aluminum scrap prices. Some participants in the recycling industry believe that after the National Day holiday, aluminum scrap prices will maintain a pattern of holding up well, as the tight supply fundamentals of aluminum scrap are difficult to alleviate in the short term, providing strong support for prices. In October, aluminum scrap prices are expected to be guided higher under the influence of primary aluminum prices. However, other feedback suggests that downstream demand is stable and improving, but scrap utilization enterprises' acceptance of high-priced raw materials and their psychology of driving down prices still exist, which will limit the upside for prices. Under SMM's comprehensive assessment, 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 focus on the sustainability of post-holiday downstream demand and further guidance from primary aluminum price trends.

Silicon metal side: On October 15, SMM East China non-oxygen blown #553 was at 9,200-9,400 yuan/mt; oxygen-blown #553 at 9,300-9,500 yuan/mt; #521 at 9,500-9,700 yuan/mt; #441 at 9,600-9,700 yuan/mt; #421 at 9,600-9,800 yuan/mt; #421 for silicone use at 9,800-10,300 yuan/mt; #3303 at 10,500-10,600 yuan/mt. Silicon prices remained stable in Kunming, Huangpu Port, Sichuan, Shanghai, Tianjin, Northwest China, and Xinjiang.

Overseas market: Overseas ADC12 offers held steady at $2,550–2,580/mt, while domestic spot prices rose by 100 yuan/mt to 20,300–20,500 yuan/mt, narrowing the immediate import loss to around 200 yuan/mt. Local ADC12 offers in Thailand were quoted at 83 baht/kg on a tax-excluded basis.

Inventory: According to SMM statistics, the daily social inventory of secondary aluminum alloy ingots in Foshan, Ningbo, and Wuxi totaled 49,151 mt on October 15, an increase of 26 mt from the previous trading day.

Summary: On Wednesday, aluminum prices continued their rebound trend. Quotations from secondary aluminum enterprises diverged, with some raising prices by 100 yuan/mt driven by costs, while others maintained a wait-and-see stance. Raw material supply remains tight, and enterprises continue to face cost pressure. Demand remains stable with a positive trend, supporting price resilience, but inventory pressure is constraining the upward momentum. In the short term, ADC12 prices are expected to maintain a fluctuating pattern. The pace of raw material supply improvement, changes in social inventory, and the post-holiday demand recovery rhythm will be key factors influencing price trends.

[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 intended as decision-making advice.]