The Most-Traded Aluminum Alloy Contract Rebounds, Year-End Demand Supports Spot Price Resilience [SMM Cast Aluminum Alloy Morning Comment]

SMM Cast Aluminum Alloy Morning Comment on Dec. 1

Futures: On Friday night, the most-traded cast aluminum alloy 2601 contract opened at 20,615 yuan/mt, fluctuated between 20,535-20,865 yuan/mt, and finally closed at 20,715 yuan/mt, up 120 yuan/mt or 0.58% from the previous trading day. In the KDJ indicator, the J-line crossed above the K/D lines, showing a short-term rebound signal; however, the indicator values were in the neutral range, with moderate momentum support. Trading volume was 19,578 and open interest was 5,334, both declining simultaneously, indicating cautious market sentiment.

Spot-Futures Price Spread Report: According to SMM data, on November 28, the SMM ADC12 spot price theoretically traded at a premium of 585 yuan/mt to the closing price of the most-traded cast aluminum alloy contract (AD2601) at 10:15.

Warrant Report: SHFE data showed that on November 28, the total registered warrants for cast aluminum alloy were 64,075 mt, an increase of 696 mt from the previous trading day. By region: total registered warrants in Shanghai were 4,757 mt, unchanged from the previous day; Guangdong had 20,273 mt, unchanged; Jiangsu had 10,969 mt, unchanged; Zhejiang had 21,648 mt, up 696 mt; Chongqing had 6,308 mt, unchanged; Sichuan had 120 mt, unchanged.

Aluminum Scrap: On Friday, spot primary aluminum prices saw a slight correction from the previous trading day, with SMM A00 spot aluminum closing at 21,450 yuan/mt, while the aluminum scrap market was largely stable. Entering late November, downstream demand for aluminum scrap showed significant divergence: demand for scrap used in cast aluminum alloys remained robust with a slight increase, providing more support for consumption, and some scrap-consuming enterprises in Shandong reported that raw material procurement was characterized by "prices without market availability"; meanwhile, demand for scrap used in wrought aluminum alloys began to show signs of weakening, yet tight market supply remained the main theme, keeping procurement prices high. Baled UBC was quoted in a range of 16,275-16,575 yuan/mt (ex-tax), and shredded aluminum tense scrap (priced based on aluminum content) was quoted in a range of 18,000-18,650 yuan/mt (ex-tax).

Silicon Metal: (1) Prices: Recently, spot silicon metal prices were largely stable with minor movements. Oxygen-blown #553 silicon in east China was at 9,500-9,600 yuan/mt, and #421 silicon was at 9,700-9,900 yuan/mt. On Friday, the most-traded SI contract closed at 9,130 yuan/mt, up 15 yuan/mt from the previous day. Downstream users made purchases as needed, and silicon prices continued to move sideways. (2) Production: In November 2025, domestic silicon metal production was 401,700 mt, down 11.2% MoM and down 0.7% YoY. From January to November 2025, cumulative silicon metal production was 3.8716 million mt, down 15.2% YoY. Operating rates diverged across regions in December, with silicon enterprises in Sichuan and Yunnan further cutting production while northern regions saw minor increases, resulting in an estimated slight MoM decline in overall output.

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

Inventory: According to SMM statistics, the daily social inventory of secondary aluminum alloy ingots in Foshan, Ningbo, and Wuxi totaled 49,719 mt on December 1, down 66 mt from the previous trading day and lower WoW from Monday (November

Summary: Last Friday, the SMM A00 aluminum spot price edged down 10 yuan/mt to 21,450 yuan/mt, while ADC12 held steady at 21,350 yuan/mt. Recent aluminum price fluctuations narrowed, with aluminum scrap prices adjusting slightly and auxiliary materials like silicon remaining stable, leading to limited marginal changes in overall costs. However, the core issue of tight aluminum scrap supply saw no substantial improvement. Demand side, as prices stabilized, downstream procurement sentiment improved. Additionally, automakers' year-end push for annual targets kept secondary aluminum enterprises' automotive orders robust, effectively supporting demand resilience. Overall, the front-load orders driven by year-end demand and policy changes, combined with high raw material costs, are expected to keep secondary aluminum alloy prices fluctuating rangebound in the short term, with price resilience remaining.

[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 as decision-making advice.]