Overnight, the most-traded aluminum alloy contract fluctuated and closed lower. Tight supply of aluminum scrap supported spot aluminum quotes to remain temporarily stable. [SMM Cast Aluminum Alloy Morning Comment]

11.11 SMM Cast Aluminum Alloy Morning Comment

Futures: The most-traded cast aluminum alloy 2601 contract opened at the day's high of 21,140 yuan/mt overnight, fluctuated rangebound after opening, hit a bottom of 21,035 yuan/mt, and finally closed at 21,055 yuan/mt, down 50 yuan/mt or 0.24% from the previous close. Trading volume was 1,659, open interest was 14,893. The aluminum alloy 2601 contract is currently in a short-term consolidation phase, with short-term focus on the support of the 5-day moving average (21,019); if held, the trend may continue; if broken, it may test the 10-day moving average (20,937).

Spot-Futures Price Spread Daily: According to SMM data, on November 10, the SMM ADC12 spot price had a theoretical premium of 450 yuan/mt over the closing price of the most-traded cast aluminum alloy contract (AD2601) at 10:15.

Aluminum Scrap Side: On Monday, spot primary aluminum prices fell from the previous trading day, with SMM A00 spot aluminum closing at 21,490 yuan/mt. Some aluminum scrap market prices followed aluminum lower. Baled UBC was quoted at 16,350-16,950 yuan/mt (tax excluded), shredded aluminum tense scrap (priced based on aluminum content) was quoted at 17,750-18,250 yuan/mt (tax excluded). For the price difference between A00 aluminum and aluminum scrap, the price difference between A00 aluminum and mechanical casting aluminum scrap in Shanghai narrowed by 50 yuan to 2,752 yuan/mt MoM from the previous trading day, while the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan narrowed by 50 yuan to 2,289 yuan/mt MoM from the previous trading day. The aluminum scrap market is expected to hold up well this week.

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

Overseas Market: Overseas ADC12 offers were at $2,590-2,620/mt, while domestic spot prices concentrated at 20,600-20,800 yuan/mt, with the immediate import loss widening to above 300 yuan/mt. Local ADC12 offers in Thailand (tax excluded) were at 84-85 baht/kg.

Inventory Side: According to SMM statistics, on November 10, the daily average social inventory of secondary aluminum alloy ingots in Foshan, Ningbo, and Wuxi totaled 49,705 mt, down 294 mt from the previous trading day and down 294 mt WoW from Monday (November 3).

Summary: Aluminum prices fluctuated rangebound with a slight decline on Monday, while the secondary aluminum market held steady with a wait-and-see attitude. ADC12 prices stabilized at 21,350 yuan/mt, as enterprises had weak willingness to adjust prices. The tight supply of aluminum scrap persists, coupled with high fluctuations in prices of auxiliary materials such as copper, providing strong support on the cost side. ADC12 prices still have upward momentum in the short term. Demand side, although supported by the resilience of end-use consumption, aluminum prices remain high, and downstream procurement remains cautious. In the short term, ADC12 prices are expected to hold up well. Going forward, close attention should be paid to improvements in aluminum scrap supply, the implementation effects of relevant policies, and changes in the procurement pace of downstream enterprises.

[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 intended as decision-making advice.]