Cost and Supply-Demand Tight Balance Provide Support, ADC12 Maintains Strong Performance [SMM Cast Aluminum Alloy Morning Comment]

10.3 SMM Cast Aluminum Alloy Morning Comment

Futures: The most-traded cast aluminum alloy 2512 contract opened at 20,700 yuan/mt overnight, fluctuated upward overall, and finally closed at the highest point of 20,750 yuan/mt, up 60 yuan/mt or 0.29% from the previous close. Trading volume was 824 lots, and open interest was 4,765 lots, with bears mainly reducing positions. Technical indicators show the aluminum alloy 2512 futures are in a short-term bullish trend, with the moving averages in a bullish alignment providing strong support. The price stabilized and rebounded above the support level; watch for a potential effective breakout above the previous high of 20,775 yuan/mt.

Spot-Futures Price Spread Report: According to SMM data, on October 29, the SMM ADC12 spot price had a theoretical premium of 565 yuan/mt over the closing price of the most-traded cast aluminum alloy contract (AD2512) at 10:15.

Warrant Report: SHFE data shows that on October 29, the total registered warrant volume for cast aluminum alloy was 50,636 mt, an increase of 1,800 mt from the previous trading day. By region: Shanghai's total registered volume was 4,244 mt, unchanged from the previous day; Guangdong's total registered volume was 16,133 mt, an increase of 1,830 mt; Jiangsu's total registered volume was 8,444 mt, a decrease of 30 mt; Zhejiang's total registered volume was 16,801 mt, a decrease of 272 mt; Chongqing's total registered volume was 5,014 mt, unchanged from the previous day; Sichuan's total registered volume was 0 mt, unchanged from the previous day.

Aluminum scrap side: On Wednesday, the spot price of primary aluminum increased slightly compared to the previous trading day, with SMM A00 spot aluminum closing at 21,170 yuan/mt. The aluminum scrap market overall held steady. Baled UBC was mainly quoted at 16,000-16,500 yuan/mt (ex-tax), and shredded aluminum tense scrap (priced based on aluminum content) was mainly quoted at 17,600-18,100 yuan/mt (ex-tax). Baled UBC held steady WoW, while shredded aluminum tense scrap (priced based on aluminum content), scrap wheel hub, and mechanical casting aluminum scrap increased by 100 yuan/mt WoW. Due to improved demand from downstream alloy sectors, prices for shredded aluminum tense scrap rose accordingly. Major producing regions including Jiangxi, Hubei, Foshan, Anhui, and Hunan collectively raised quotes for aluminum tense scrap series, with increases ranging from 100-200 yuan. Regarding the price difference between A00 aluminum and aluminum scrap: the price difference between A00 aluminum and mechanical casting aluminum scrap in Shanghai widened to 2,432 yuan/mt, up 10 yuan/mt WoW; the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan widened to 2,207 yuan/mt, down 107 yuan/mt WoW. The aluminum scrap market is expected to hold up well this week.

Silicon metal side: On October 29, SMM prices in east China were non-oxygen blown #553 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; and #3303 at 10,400-10,600 yuan/mt. Silicon prices rose at Huangpu Port and in parts of north-west China. Prices held steady in Kunming, Tianjin, Sichuan, Shanghai, and Xinjiang.

Overseas market: Overseas ADC12 aluminum alloy was quoted at $2,560–2,590/mt, while domestic spot prices remained flat at 20,500–20,700 yuan/mt, with immediate import losses 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, as of October 29, the combined daily social inventory of secondary aluminum alloy ingots in Foshan, Ningbo, and Wuxi totaled 48,465 mt, up 190 mt from the previous trading day but down 637 mt from Wednesday, October 22.

Summary: On Wednesday, the SMM A00 aluminum price was quoted at 21,170 yuan/mt, up slightly by 10 yuan/mt from the previous day, while the SMM ADC12 price held steady at 21,200 yuan/mt. Currently, tight supply of aluminum scrap persists, procurement costs continue to climb, and enterprises are generally purchasing at high prices to ensure order fulfillment, with low-priced sources 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 pressures 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 as decision-making advice.]