10.29 SMM Cast Aluminum Alloy Morning Comment
Futures: The most-traded cast aluminum alloy ad2512 futures contract opened at the day's low of 20,540 yuan/mt overnight, then fluctuated upward to hit a high of 20,690 yuan/mt, and finally closed at 20,680 yuan/mt, up 105 yuan/mt or 0.51% from the previous close. Trading volume was 617 lots, and open interest was 5,096 lots, with bears mainly reducing positions. Technical indicators suggest the AD2512 futures contract is in a short-term bullish trend, with the moving averages in a bullish alignment providing strong support, and the price stabilizing and rebounding above the support level; however, attention should be paid to whether it can break through the resistance level at 20,775.
Spot-Futures Price Spread Report: According to SMM data, on October 28, the SMM ADC12 spot price theoretically traded at a premium of 580 yuan/mt to the closing price of the most-traded cast aluminum alloy contract (AD2512) at 10:15.
Warrant Report: SHFE data showed that on October 28, the total registered warrant volume for cast aluminum alloy was 48,836 mt, an increase of 118 mt from the previous trading day. Among them, the total registered volume in Shanghai was 4,244 mt, unchanged from the previous trading day; the total registered volume in Guangdong was 14,303 mt, an increase of 177 mt from the previous trading day; the total registered volume in Jiangsu was 8,474 mt, an increase of 213 mt from the previous trading day; the total registered volume in Zhejiang was 16,801 mt, a decrease of 272 mt 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: On Tuesday, the spot primary aluminum price was flat from the previous trading day, with the SMM A00 spot price closing at 21,160 yuan/mt; aluminum scrap market prices overall held steady. Baled UBC was mainly offered at 16,000-16,500 yuan/mt (ex-tax), shredded aluminum tense scrap (priced based on aluminum content) was mainly offered at 17,500-18,000 yuan/mt (ex-tax). Baled UBC rose 50 yuan/mt MoM, while shredded aluminum tense scrap (priced based on aluminum content), scrap wheel hub, and mechanical casting aluminum scrap each rose 100 yuan/mt MoM. Due to improved demand from downstream alloy sectors, aluminum tense scrap prices rose accordingly, with collective price increases for aluminum tense scrap series in Jiangxi, Hubei, Foshan, Anhui, Hunan, and other regions, ranging from 100-200 yuan. The aluminum scrap market is expected to hold up well this week, closely tracking primary aluminum trends and policy developments.
Silicon Metal: (1) Price: Spot silicon metal prices remained low and stagnant. Yesterday, SMM oxygen-blown #553 silicon in east China was at 9,300-9,400 yuan/mt, flat from the previous day. Futures prices fluctuated; the SI2512 contract hit a low of 8,975 yuan/mt and closed at 8,980 yuan/mt at the end of the session, flat from the previous day. (2) Production: Operating rates of silicon enterprises diverged between the north and the south. As the dry season approaches in Sichuan and Yunnan, some silicon enterprises in Yunnan and Sichuan recently implemented production cuts, and silicon metal supply showed a downward trend.
Overseas market: Overseas ADC12 aluminum alloy was quoted at $2,560–2,590/mt, while the domestic spot aluminum price rose by 100 yuan/mt to 20,500–20,700 yuan/mt, with the immediate import loss hovering around 200 yuan/mt. Local ADC12 aluminum alloy in Thailand was quoted at 83.5 baht/kg, excluding tax.
Inventory side: According to SMM statistics, the daily social inventory of secondary aluminum alloy ingots in Foshan, Ningbo, and Wuxi totaled 48,465 mt on October 29, up 190 mt from the previous trading day but down 637 mt WoW (compared to October 22).
Summary: On Tuesday, the SMM A00 aluminum price was quoted at 21,160 yuan/mt, flat from the previous day, while the SMM ADC12 price held steady at 21,200 yuan/mt. Currently, the tight supply-demand balance for aluminum scrap persists, procurement costs continue to climb, and enterprises are generally purchasing at high prices to ensure order fulfillment, with low-priced sources being scarce. Due to insufficient raw material circulation, high raw material costs eroding profits, and unclear policies in regions such as Jiangxi and Anhui, industry supply has contracted. Overall demand remains resilient, coupled with low finished product inventories at manufacturers and ongoing order delivery pressure, providing some support to market prices. In the short term, supported by rigid cost support and a tight supply-demand balance, ADC12 aluminum alloy ingot prices are expected to hold up well. Subsequent attention should focus on raw material supply, consumption performance, and inventory changes.
[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 constituting decision-making advice.]
