Bulls Increase Positions Combined with Moving Average Support, Cast Aluminum Alloy's Most-Traded Contract Holds Up Well in the Short Term [SMM Cast Aluminum Alloy Morning Comment]

10.23 SMM Cast Aluminum Alloy Morning Comment

Futures: The most-traded cast aluminum alloy 2512 contract opened at 20,570 yuan/mt overnight, rose to a high of 20,650 yuan/mt, fell to a low of 20,555 yuan/mt, and closed at 20,560 yuan/mt, up 45 yuan/mt or 0.22% from the previous close. Trading volume was 1,735 lots, open interest was 12,867 lots, with bulls mainly increasing positions. The short-term moving average (MA5: 20,469) trended upward, and the price stayed above MA5, MA10, and MA20, showing a short-term bullish alignment with strong support.

Spot-Futures Price Spread Report: According to SMM data, on October 22, the SMM ADC12 spot price theoretically widened its premium to 635 yuan/mt against the most-traded cast aluminum alloy contract (AD2512) closing price at 10:15.

Warrant Report: SHFE data showed that on October 22, the total registered warrant volume for cast aluminum alloy was 47,623 mt, an increase of 1,760 mt from the previous trading day. Among them, the total registered volume in Shanghai was 4,244 mt, unchanged from the previous trading day; Guangdong's total registered volume was 14,126 mt, up 1,760 mt from the previous trading day; Jiangsu's total registered volume was 8,590 mt, unchanged from the previous trading day; Zhejiang's total registered volume was 15,649 mt, unchanged from the previous trading day; Chongqing's total registered volume was 5,014 mt, unchanged from the previous trading day; Sichuan's total registered volume was 0 mt, unchanged from the previous trading day.

Aluminum scrap side: On Wednesday, spot primary aluminum prices fluctuated rangebound compared to the previous trading day, with SMM A00 spot aluminum closing at 20,980 yuan/mt, while aluminum scrap market prices were generally flat. Baled UBC was quoted at 15,900-16,500 yuan/mt (ex-tax), 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. In terms of the price difference between A00 aluminum and aluminum scrap, the price difference between A00 aluminum and mechanical casting aluminum scrap in Shanghai widened by 50 yuan/mt from Monday to 2,242 yuan/mt, while the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan widened by 70 yuan/mt from Monday to 2,238 yuan/mt.

Silicon metal side: On October 22, SMM non-oxygen blown #553 in east China was at 9,200-9,400 yuan/mt; oxygen-blown #553 at 9,300-9,400 yuan/mt; #521 at 9,500-9,600 yuan/mt; #441 at 9,500-9,700 yuan/mt; #421 at 9,500-9,800 yuan/mt; #421 for silicone use at 9,800-10,200 yuan/mt; #3303 at 10,400-10,600 yuan/mt. Some silicon prices in Huangpu Port, Tianjin, Northwest, Shanghai, and Xinjiang regions also declined. Prices in Kunming and Sichuan regions held steady.

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. The local ADC12 price in Thailand was quoted at 83 baht/kg, excluding tax.

Inventory: According to SMM statistics, the daily social inventory of secondary aluminum alloy ingots in Foshan, Ningbo, and Wuxi totaled 49,101 mt on October 22, up 124 mt from the previous trading day but down 50 mt WoW (compared to October 15).

Summary: Aluminum prices edged up slightly yesterday, while the SMM ADC12 price held steady at 21,100 yuan/mt. The current tight supply of aluminum scrap is unlikely to ease in the short term, providing solid cost support. Some enterprises have seen their operating rates decline due to raw material shortages, losses, or policy uncertainties. Finished product inventories at plants remain low, keeping offers firm or prompting active price increases. Although demand has not shown significant improvement compared with September, it remains resilient overall, lending support to prices. However, high social inventories and warrant pressure may limit upside room, while the impact of policy implementation on the supply side warrants attention. In the near term, ADC12 prices are expected to hold up well, with a focus on raw material availability, demand performance, 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.]