Tight Raw Material Supply Coupled with Downstream Cautious Bargaining, ADC12 Quotations Slightly Diverge [SMM Cast Aluminum Alloy Morning Comment]

November 6 SMM Cast Aluminum Alloy Morning Comment

Futures: The most-traded cast aluminum alloy contract ad2601 opened at 20,815 yuan/mt overnight. After briefly dipping to a low of 20,770 yuan/mt in early trading, it quickly rebounded and then fluctuated upward within the range of 20,830–20,940 yuan/mt, eventually closing at 20,930 yuan/mt, up 115 yuan/mt or 0.48% from the previous close. Trading volume was 1,369 lots, and open interest stood at 14,653 lots, with the increase mainly driven by bulls. Short-term bullish momentum dominates, and the medium-term trend is biased upward. If the previous high of 21,155 yuan/mt is effectively broken, the upward space may further expand; however, attention should be paid to the strength of the breakthrough at the previous high resistance level. If resistance is encountered, it may pull back to near the MA10 (20,815 yuan/mt) to seek support.

Spot-Futures Price Spread Report: According to SMM data, on November 5, the SMM ADC12 spot price showed a theoretical premium of 545 yuan/mt over the closing price of the most-traded cast aluminum alloy contract (ad2601) at 10:15.

Warrant Report: SHFE data shows that on November 5, the total registered volume of cast aluminum alloy warrants was 55,537 mt, an increase of 660 mt from the previous trading day. Among them, the total registered volume in Shanghai was 4,484 mt, unchanged from the previous trading day; the total registered volume in Guangdong was 17,094 mt, a decrease of 60 mt from the previous trading day; the total registered volume in Jiangsu was 9,766 mt, an increase of 720 mt from the previous trading day; the total registered volume in Zhejiang was 19,179 mt, an increase of 2,289 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 Wednesday, spot primary aluminum prices fell compared to the previous trading day, with SMM A00 spot closing at 21,300 yuan/mt. Aluminum scrap market prices followed aluminum prices lower. Baled UBC was quoted at 16,000–16,650 yuan/mt (tax excluded), and shredded aluminum tense scrap (priced based on aluminum content) was quoted at 17,500–18,000 yuan/mt (tax excluded). Prices for baled UBC, clean tapping aluminum wire, shredded aluminum tense scrap (priced based on aluminum content), scrap wheel hub, and mechanical casting aluminum scrap decreased by 50–150 yuan/mt MoM.

Silicon Metal: On November 5, 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; #3303 at 10,400–10,600 yuan/mt. Individual silicon prices increased in Kunming. Individual silicon prices decreased in Tianjin. Silicon prices held steady in Huangpu Port, Northwest China, Xinjiang, Sichuan, and Shanghai.

Overseas Market: Overseas ADC12 was quoted at $2,560–2,590/mt, while domestic spot prices fell 100 yuan/mt to 20,500–20,700 yuan/mt, widening the immediate import loss to around 300 yuan/mt. The tax-exempt local ADC12 price in Thailand was quoted at 83-84 baht/kg.

Inventory: According to SMM statistics, the combined daily social inventory of secondary aluminum alloy ingots in Foshan, Ningbo, and Wuxi totaled 49,895 mt on November 5, down 136 mt from the previous trading day but up 1,430 mt WoW (compared to October 29).

Summary: Yesterday, the ADC12 price dropped by 50 yuan/mt to 21,350 yuan/mt. Against the backdrop of high aluminum prices pulling back, market quotations diverged: some enterprises quickly followed with a 100 yuan/mt decrease, while others maintained their prices and adopted a wait-and-see approach. Due to recent intensified price fluctuations, downstream procurement has become more cautious, focusing mainly on restocking for rigid demand. Raw material supply remains tight, and procurement costs for secondary aluminum plants stay elevated. Coupled with support from the supply side, ADC12 prices are expected to remain firm in the short term.

[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.]