The Most-Traded Cast Aluminum Contract Approaches High of 21,400 Yuan/mt, Market Caution Rises [SMM Cast Aluminum Alloy Morning Comment]

11.14 SMM Cast Aluminum Alloy Morning Comment

Futures: The most-traded cast aluminum alloy 2601 contract opened at 21,350 yuan/mt overnight, continued to hold up well, touched a high of 21,375 yuan/mt, a low of 21,280 yuan/mt, and finally closed at 21,370 yuan/mt, up 30 yuan/mt or 0.14% from the previous close. Trading volume was 2,465, open interest was 14,988. The current price is approaching the previous high area, and it is necessary to monitor whether it can break through the resistance near 21,400 yuan/mt. Overall, the current contract is in a bullish trend, but short-term fluctuations have converged somewhat; changes in open interest and the breakthrough of resistance levels need to be watched.

Basis Daily: According to SMM data, on November 13, the SMM ADC12 spot price theoretically traded at a premium of 390 yuan/mt to the closing price of the most-traded cast aluminum alloy contract (AD2601) at 10:15.

Warrant Daily: SHFE data showed that on November 13, the total registered volume of cast aluminum alloy warrants was 57,799 mt, an increase of 299 mt from the previous trading day. The total registered volume in Shanghai was 4,757 mt, unchanged from the previous trading day; the total registered volume in Guangdong was 18,002 mt, unchanged from the previous trading day; the total registered volume in Jiangsu was 10,847 mt, an increase of 299 mt from the previous trading day; the total registered volume in Zhejiang was 19,179 mt, unchanged 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 Thursday, spot primary aluminum prices rose from the previous trading day, with the SMM A00 spot price closing at 21,920 yuan/mt. Aluminum scrap market prices followed the rise in aluminum prices. Baled UBC was mainly offered at 16,550-17,050 yuan/mt (ex-tax), shredded aluminum tense scrap (priced based on aluminum content) was mainly offered at 17,650-18,550 yuan/mt (ex-tax). Aluminum scrap prices in Foshan, Henan, Guizhou, Jiangxi, and other regions followed primary aluminum up by 100-200 yuan/mt, while prices in Shanghai, Zhejiang, Jiangsu, Tianjin, and other regions mainly increased by 200-250 yuan/mt. Regarding the price difference between A00 aluminum and aluminum scrap, the price difference between A00 aluminum and mechanical casting aluminum scrap in Shanghai widened by 250 yuan WoW to 3,182 yuan/mt, and the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan widened by 122 yuan WoW to 2,571 yuan/mt. The aluminum scrap market is expected to maintain its strength this week, and the complex tug-of-war between sellers and buyers in the aluminum scrap market will continue.

Silicon Metal: (1) Price: Yesterday, SMM oxygen-blown #553 silicon in east China was at 9,400-9,600 yuan/mt, flat from the previous day; #441 silicon was at 9,600-9,800 yuan/mt, flat from the previous day. The futures SI2601 contract closed at 9,145 yuan/mt yesterday, down 50 yuan/mt from the previous day. Recently, transactions were relatively active in regions like Xinjiang and Tianjin. In Xinjiang, silicon enterprises mainly signed orders based on point price, while in Tianjin, traders mainly sold based on the spot-futures price spread. Silicon metal prices fluctuated rangebound with limited change. Recent views suggest rangebound fluctuations will dominate. Demand side, frequent "anti-involution" disruptions in polysilicon and silicone sectors require continued monitoring of downstream operating rates and market sentiment feedback. (2) Social inventory: SMM statistics show that on November 13, total social inventory of silicon metal in major regions was 546,000 mt, down 6,000 mt WoW. This included 127,000 mt in general social warehouses, flat WoW, and 419,000 mt in social delivery warehouses (including portions not registered as warrants and spot inventory), down 6,000 mt WoW. (Excluding Inner Mongolia, Ningxia, Gansu, etc.). (Excluding Inner Mongolia, Ningxia, Gansu, etc.)

Overseas market: Current overseas ADC12 quotation range is $2,600–2,620/mt. As domestic spot prices rose rapidly to 20,800–21,000 yuan/mt, coupled with a stronger RMB exchange rate, immediate import losses narrowed to near the break-even line. Local ADC12 ex-tax quotations in Thailand are at 84–85 baht/kg.

Inventory: According to SMM statistics, on November 13, social inventory of secondary aluminum alloy ingots in mainstream domestic consumption areas was 55,700 mt, slightly down 100 mt from last Thursday.

Summary: Aluminum prices hit a new high for the year on Thursday. Aluminum scrap prices actively followed the rise in aluminum prices, pushing up ADC12 costs again. Currently, aluminum scrap accounts for over 90% of the cost, deepening industry losses. Overall downstream demand was stable with an increase, but the rapid surge in aluminum prices to 22,000 yuan/mt suppressed purchase willingness. Die-casting enterprises with high inventory focused on digesting inventories, slowing their procurement pace; low-inventory enterprises maintained rigid restocking, supporting bottom demand. Overall, ADC12 prices are expected to hold up well in the short term. Cost support remains relatively solid, and the tight supply of aluminum scrap is unlikely to ease soon, making raw material prices more likely to rise than fall. Demand side shows some resilience, coupled with low industry inventory, just-in-time procurement will form a price floor. However, current aluminum prices are at yearly highs, and downstream acceptance has declined, which may limit further upside room.

[Data source statement: Except for public 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.]