10.17 SMM Cast Aluminum Alloy Morning Comment
Futures: The most-traded AD2512 contract for cast aluminum alloy opened at 20,495 yuan/mt, reached a high of 20,560 yuan/mt, hit bottom at 20,475 yuan/mt, and finally closed at 20,525 yuan/mt, up 35 yuan/mt or 0.17% from the previous close. Trading volume was 1,374 lots, with open interest at 13,374 lots, mainly driven by increased long positions. From a technical perspective, the current AD2512 contract is in a medium-term bullish and short-term consolidation state, with support at 20,400 yuan/mt and resistance at 20,700 yuan/mt.
Daily Basis Report: According to SMM data, on October 16, the theoretical premium of SMM ADC12 spot price over the closing price of the most-traded AD2512 futures contract at 10:15 AM was 590 yuan/mt.
Daily Warrant Report: On October 15, the total registered warrants for cast aluminum alloy were 43,197 mt, an increase of 753 mt from the previous trading day. In Shanghai, the total registered amount was 4,303 mt, unchanged from the previous trading day; in Guangdong, it was 10,367 mt, also unchanged; in Jiangsu, it was 8,590 mt, up 120 mt; in Zhejiang, it was 14,923 mt, up 633 mt; in Chongqing, it was 5,014 mt, unchanged; and in Sichuan, it was 0 mt, unchanged.
Aluminum Scrap: On Thursday, the spot price of primary aluminum rose slightly compared to the previous trading day, with SMM A00 spot closing at 20,950 yuan/mt. The overall aluminum scrap market prices remained stable. Baled UBC prices ranged from 15,900 to 16,500 yuan/mt (excluding tax), while shredded aluminum tense scrap (priced based on aluminum content) ranged from 17,300 to 17,800 yuan/mt (excluding tax). Baled UBC prices increased by 50 yuan/mt WoW, while shredded aluminum tense scrap (priced based on aluminum content), scrap wheel hub, and mechanical casting aluminum scrap remained unchanged. In terms of the price difference between A00 aluminum and aluminum scrap, the difference in Shanghai for mechanical casting aluminum scrap was 2,212 yuan/mt, and in Foshan for mixed aluminum extrusion scrap free of paint, it was 2,189 yuan/mt. It is expected that the aluminum scrap market will hold up well next week, with shredded aluminum tense scrap (priced based on aluminum content) mainstream prices ranging from 17,500 to 18,000 yuan/mt. The tight supply of raw materials is unlikely to change in the short term, and SHFE aluminum has strong support in the 20,800-20,850 yuan/mt range. If it breaks through the 21,000 yuan/mt level, it will further convey positive signals. On the other hand, the uncertainty of Trump's tariff threats, the insufficient "September-October peak season" demand, and the limited acceptance of high-priced raw materials by scrap utilization enterprises, along with the inventory pressure of finished products, will all suppress purchasing enthusiasm. The market needs to closely monitor whether the primary aluminum price can maintain its high level, the post-holiday restocking pace of secondary aluminum enterprises, and the sustainability of end-use demand.
Silicon Metal: (1) Prices: This week, the spot silicon metal prices were weak and stagnant. Yesterday, SMM oxygen-blown #553 silicon in East China was priced at 9,300-9,400 yuan/mt, down 100 yuan/mt WoW. In the futures market, the main silicon metal contract closed at 8,605 yuan/mt, down 35 yuan/mt WoW. During the week, the lowest point for the main contract was 8,495 yuan/mt, and the highest point was 8,865 yuan/mt, with the overall center of gravity lower than last week.
Trading firms engaging in both spot and futures market still offered more competitive prices than silicon enterprises, and as futures fell to $8,500/mt or below, the number of buy orders executed in the market increased. (2) Production: Operating rates for silicon metal in Xinjiang continued to increase, while rates in other producing regions were largely stable; overall supply of silicon metal maintained an upward trend. (3) Social inventory: According to SMM statistics, social inventory of silicon metal in major regions totaled 562,000 mt as of October 16, up 17,000 mt WoW. This included 120,000 mt in general social warehouses (flat MoM from pre-holiday levels) and 442,000 mt in delivery warehouses (including unregistered warrants and spot inventory portions), an increase of 17,000 mt WoW (excluding Inner Mongolia, Gansu, etc.).
Overseas market: Overseas ADC12 offers held steady at $2,550–2,580/mt, while domestic spot prices remained at 20,300–20,500 yuan/mt, with the immediate import loss narrowing to around 200 yuan/mt. Local ADC12 offers in Thailand stood at 83 baht/kg, excluding tax.
Inventory: According to SMM statistics, social inventory of secondary aluminum alloy ingots in mainstream domestic consumption areas was 54,800 mt as of October 16, down 1,600 mt from October 9.
Summary: Aluminum prices extended their rebound on Thursday, while secondary aluminum enterprises kept offers steady and adopted a wait-and-see stance. The SMM ADC12 price held firm at 21,050 yuan/mt. Tight supply of aluminum scrap continues to underpin costs in the short term, and demand resilience coupled with low plant inventories provides further support. However, high social inventory and warrant pressure may limit upside room, and the impact of policy implementation on the supply side warrants attention. ADC12 prices are expected to hold up well in the near term, with focus on raw material availability, the pace of demand recovery, and inventory changes.
[Data source statement: Except for publicly available information, other data are derived by SMM based on public information, market communication, and SMM’s internal database model, and are for reference only, not constituting decision-making advice.]
