Cast Aluminum the Most-Traded Contract Fluctuates Above 21,000, Focus on Breaking Previous Highs and Downstream Order Performance [SMM Cast Aluminum Alloy Morning Comment]

Nov. 11 SMM Cast Aluminum Alloy Morning Comment

Futures: The most-traded cast aluminum alloy 2601 contract opened at 21,065 yuan/mt overnight, hitting a high of 21,090 yuan/mt and a low of 20,925 yuan/mt, and finally closed at 21,070 yuan/mt, up 5 yuan/mt or 0.02% from the previous close. Trading volume was 2,222 lots, and open interest stood at 14,913 lots, with bears leading the reduction in positions. Recent candlesticks have been predominantly bullish, and although the gain for the day was minimal, the upward trend from the previous period continued. Prices fluctuated near the previous high (21,155 yuan/mt), which is considered a consolidation phase within the trend. If the previous high is effectively broken, the upside potential may further expand.

Spot-Futures Price Spread Report: According to SMM data, on November 3, the spot price of SMM ADC12 narrowed to a theoretical premium of 420 yuan/mt against the closing price of the most-traded cast aluminum alloy contract (AD2601) at 10:15.

Warrant Report: SHFE data showed that on November 3, the total registered volume of cast aluminum alloy warrants was 51,117 mt, an increase of 273 mt from the previous trading day. Among them, the total registered volume in Shanghai was 4,214 mt, unchanged from the previous trading day; the total registered volume in Guangdong was 16,555 mt, an increase of 184 mt from the previous trading day; the total registered volume in Jiangsu was 8,444 mt, unchanged from the previous trading day; the total registered volume in Zhejiang was 16,890 mt, an increase of 89 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 Monday, the spot price of primary aluminum rose from the previous trading day, with SMM A00 spot aluminum closing at 21,440 yuan/mt. Aluminum scrap market prices followed aluminum prices higher. As the traditional peak season ended, downstream demand showed significant divergence. Demand for scrap used in cast aluminum alloys remained stable, providing more consumption support, while demand for scrap used in wrought aluminum alloys began to show signs of weakening. However, tight market supply remained the main theme, and procurement prices remained high, though the sustainability of these high levels remains to be seen. Yesterday, baled UBC was quoted in a range of 16,100-16,750 yuan/mt (excluding tax), and shredded aluminum tense scrap (priced based on aluminum content) was quoted in a range of 17,900-18,250 yuan/mt (excluding tax). Baled UBC held steady MoM, while shredded aluminum tense scrap (priced based on aluminum content), scrap wheel hubs, and mechanical casting aluminum scrap saw price increases ranging from 50-150 yuan. As spot aluminum prices continued to rise, shredded aluminum tense scrap prices followed suit, with collective increases in aluminum tense scrap quotes in Jiangxi, Hubei, Foshan, Anhui, Hunan, and other regions, up 100 yuan MoM. In the afternoon, SHFE aluminum futures continued to rise, and some secondary aluminum enterprises in Jiangxi further raised their aluminum tense scrap quotes, with cumulative increases reaching 200 yuan/mt.

Silicon Metal: On November 3, SMM non-oxygen blown #553 in east China was at 9,200-9,400 yuan/mt; oxygen-blown #553 at 9,400-9,500 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 9,800-10,200 yuan/mt; and #3303 at 10,400-10,600 yuan/mt. Individual silicon prices rose in Huangpu Port and north-west China. Individual silicon prices fell in Tianjin. Silicon prices held steady in Kunming, Xinjiang, Sichuan, and Shanghai.

Overseas market: Overseas ADC12 offers were at $2,560–2,590/mt, while domestic spot prices rose by 100 yuan/mt to 20,600–20,800 yuan/mt, with immediate import losses around 200 yuan/mt. Local ADC12 offers in Thailand were at 83–84 baht/kg, excluding tax.

Inventory: According to SMM statistics, the daily social inventory of secondary aluminum alloy ingots in Foshan, Ningbo, and Wuxi totaled 50,291 mt on November 3, up 165 mt from the previous trading day and increasing 1,916 mt WoW (compared to October 27).

Summary: On Monday, the SMM ADC12 price rose by 100 yuan/mt to 21,400 yuan/mt. The tight raw material supply continued, with aluminum scrap market showing hold back cargoes sentiment, and procurement costs for secondary aluminum plants kept climbing. Although end-use consumption remained resilient, the rapid price surge has triggered wait-and-see sentiment among downstream enterprises, leading to a slowdown in transaction pace. Overall, current cost and supply-side support dominate, and ADC12 prices are expected to hold up well in the short term, with attention needed on raw material prices, inventory changes, and downstream order performance.

[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.]