The cost margin for secondary aluminum alloy saw limited changes, and prices remain supported in the short term. [SMM Cast Aluminum Alloy Morning Comment]

11.28 SMM Cast Aluminum Alloy Morning Comment

Futures: The most-traded cast aluminum alloy 2601 contract opened at 20,615 yuan/mt overnight, touched a high of 20,865 yuan/mt, a low of 20,535 yuan/mt, and finally closed at 20,715 yuan/mt, up 120 yuan/mt or 0.58% from the previous close. Trading volume was 19,578, open interest was 5,334. K-value 44.39, D-value 38.78, J-value 55.61, the J-line crossed above the K/D line, indicating a short-term rebound signal. Value 99.41, in the neutral range, with moderate volume support. Trading volume and open interest both declined, indicating reduced capital participation and cautious market sentiment.

Basis Daily: According to SMM data, on November 27, the SMM ADC12 spot price showed a theoretical premium of 560 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 27, the total registered warrant volume for cast aluminum alloy was 63,379 mt, an increase of 394 mt from the previous trading day. Among them, the total registered volume in Shanghai was 4,757 mt, unchanged from the previous day; the total registered volume in Guangdong was 20,273 mt, a decrease of 29 mt from the previous day; the total registered volume in Jiangsu was 10,969 mt, a decrease of 31 mt from the previous day; the total registered volume in Zhejiang was 20,952 mt, an increase of 423 mt from the previous day; the total registered volume in Chongqing was 6,308 mt, unchanged from the previous day; the total registered volume in Sichuan was 120 mt, unchanged from the previous day.

Aluminum Scrap: On Thursday, spot primary aluminum prices continued to rise slightly compared to the previous trading day, with SMM A00 spot closing at 21,460 yuan/mt. The aluminum scrap market followed the increase collectively. Baled UBC was quoted centrally at 16,275-16,575 yuan/mt (ex-tax), shredded aluminum tense scrap (priced based on aluminum content) was quoted centrally at 18,000-18,650 yuan/mt (ex-tax). Prices for clean tapping aluminum wire, mixed aluminum extrusion scrap free of paint, mechanical casting aluminum scrap, scrap motorcycle wheel, and mixed aluminum tense scrap increased slightly by 0-50 yuan/mt MoM, while the price for baled UBC increased by 50-150 yuan/mt MoM. Aluminum scrap prices in Sichuan, Guizhou, Henan, and Hubei were largely stable MoM. The market is expected to continue the high-level tug-of-war between sellers and buyers. It is recommended to closely track primary aluminum price trends and adjustments in downstream enterprise procurement strategies.

Silicon Metal: On November 27, SMM non-oxygen blown #553 silicon metal in east China was at 9,300-9,400 yuan/mt; oxygen-blown #553 was at 9,500-9,600 yuan/mt; #521 was at 9,600-9,700 yuan/mt; #441 was at 9,700-9,800 yuan/mt; #421 was at 9,700-9,900 yuan/mt; #421 for silicone use was at 9,800-10,200 yuan/mt; #3303 was at 10,300-10,600 yuan/mt. Individual silicon prices in Huangpu Port, Tianjin, and north-west China also increased. Silicon prices in Kunming, Xinjiang, Sichuan, and Shanghai remained stable.

Overseas market: The current ADC12 quotation range overseas remained at $2,600–2,630/mt, with the import arbitrage loss widening to around 500 yuan/mt, keeping the import window closed.

Inventory: According to SMM statistics, the total weekly social inventory of secondary aluminum alloy ingots in four major consumption areas—Foshan, Ningbo, Wuxi, and Shanghai—amounted to 5.56 mt on November 27, down 0.09 mt WoW (November 20).

Summary: Spot side, the SMM A00 aluminum spot price edged up 60 yuan/mt day-on-day to 21,460 yuan/mt on Thursday, while ADC12 held steady at 21,350 yuan/mt. Aluminum prices fluctuated within a narrower range this week, with aluminum scrap prices adjusting slightly in tandem, while prices of auxiliary materials such as silicon remained stable, resulting in limited marginal changes in overall costs. Although cost pressures on enterprises eased somewhat, the core tight supply situation for aluminum scrap saw no substantial improvement. Demand side, as price movements stabilized, downstream purchasing sentiment improved. Additionally, automakers' year-end push for annual targets supported robust orders in the automotive sector for secondary aluminum enterprises, effectively underpinning demand resilience. Overall, with the front-loading effect of orders driven by year-end demand and policy changes continuing to emerge, coupled with high raw material cost support, secondary aluminum alloy prices are expected to fluctuate rangebound in the near term, maintaining price resilience.

[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.]