SHFE aluminum prices pull back, alloy enterprises actively follow the rise [SMM cast aluminum alloy morning comment]

12.12 SMM Cast Aluminum Alloy Morning Comment

Futures: The most-traded cast aluminum alloy 2601 contract opened at 21,070 yuan/mt overnight, climbed to a high of 21,175 yuan/mt, fell to a low of 20,730 yuan/mt, and finally closed at 21,130 yuan/mt, down 60 yuan/mt or 0.28% from the previous close. Trading volume was 15,905, and open interest was 17,484. The K-value was 61.25, the D-value was 64.93, and the J-value was 53.9, within the neutral range of 50-80. With the J-value below the K/D values, there is short-term pullback pressure. After the previous surge to 21,440 and subsequent pullback, the contract is currently within the weekly oscillation range. Support can be watched near 20,700, with resistance corresponding to the previous high of 21,440.

Basis Daily: According to SMM data, on December 11, the SMM ADC12 spot price had a theoretical premium of 570 yuan/mt over the closing price of the most-traded cast aluminum alloy contract (AD2601) at 10:15.

Warrant Daily: SHFE data showed that on December 11, the total registered volume of cast aluminum alloy warrants was 68,995 mt, an increase of 362 mt from the previous trading day. The breakdown by region was: Shanghai (total registered volume 4,757 mt, unchanged), Guangdong (21,500 mt, down 29 mt), Jiangsu (11,988 mt, unchanged), Zhejiang (24,022 mt, up 391 mt), Chongqing (6,308 mt, unchanged), and Sichuan (420 mt, unchanged).

Aluminum Scrap: Spot primary aluminum prices rose on Thursday compared to the previous trading day, with the SMM A00 spot price closing at 21,890 yuan/mt. The aluminum scrap market followed the increase collectively. Baled UBC was quoted in the range of 16,350-16,850 yuan/mt (ex-tax), and shredded aluminum tense scrap (priced based on aluminum content) was quoted in the range of 18,200-18,750 yuan/mt (ex-tax). Prices for baled UBC, clean tapping aluminum wire, mixed aluminum extrusion scrap free of paint, mechanical casting aluminum scrap, scrap motorcycle wheel, and mixed aluminum tense scrap were raised by 100 yuan/mt MoM. The price difference between A00 aluminum and shredded aluminum tense scrap closed at 1,946 yuan/mt, and the price difference between A00 aluminum and bare bright aluminum wire in Jiangsu was 900.6 yuan/mt. The overall tug-of-war between sellers and buyers continues. It is necessary to closely track fluctuations in primary aluminum, environmental protection policies, and downstream procurement pace, while remaining vigilant about the risk of a pullback from high levels.

Silicon Metal: Prices: Yesterday, SMM oxygen-blown #553 silicon in east China was at 9,100-9,300 yuan/mt, flat from the previous day. This week, the price center for silicon metal was on the weaker side, with varying sales performance among different suppliers. After the futures decline, trading volume from traders and downstream buy orders increased significantly, and spot-futures arbitrage merchants saw smooth sales. Most silicon enterprises adopted a wait-and-see approach, either temporarily suspending quotes or maintaining original prices, showing a generally strong sentiment to hold prices firm. Production: Over the past week, adjustments to the silicon metal production schedule showed minor fluctuations, and the total weekly supply saw limited change WoW. Xinjiang issued an announcement regarding a regional heavy pollution weather warning last night. Based on predictions from the autonomous region's meteorological and environmental monitoring departments and expert consultations, the office of the autonomous region's heavy pollution weather emergency command decided to activate an orange warning for heavy pollution weather in the "Urumqi-Changji-Shihezi" region starting at 12:00 on December 13. This may impact production at silicon enterprises in the region, and changes in operating rates in Xinjiang should be monitored. Inventory: Social inventory: According to SMM statistics, the total social inventory of silicon metal in major regions on December 11 was 561,000 mt, an increase of 3,000 mt WoW. This included 136,000 mt in general social warehouses, up 5,000 mt WoW, and 425,000 mt in social delivery warehouses (including portions not registered as warrants and spot inventory), down 2,000 mt WoW.

Overseas market: Current ADC12 offers in the Southeast Asian market held steady at $2,620–2,640/mt. Due to the rapid rebound in domestic prices, immediate import losses narrowed to around 200 yuan/mt.

Inventory: According to SMM statistics, the weekly social inventory of secondary aluminum alloy ingots in four major consumption areas—Foshan, Ningbo, Wuxi, and Shanghai—totaled 54,700 mt on December 11, down 600 mt from the previous day.

Summary: Spot side, yesterday's SMM A00 aluminum spot price rose by 120 yuan/mt to 21,890 yuan/mt, while the ADC12 price rebounded by 100 yuan/mt to 21,600 yuan/mt, recovering the previous day's losses. This week, aluminum prices showed a rebound for the first time, and the secondary aluminum market responded actively, with manufacturers generally raising offers by 100–200 yuan/mt. Raw material side, although aluminum scrap prices followed the aluminum price correction, leading to a slight weakening in cost support, they remained at a relatively high level amid tight supply. Demand side, performance showed marginal weakening, coupled with the impact of sharp aluminum price fluctuations, downstream enterprises' purchase willingness turned cautious, and market trading activity was moderate. Comprehensive analysis of the supply-demand pattern and cost factors suggests that ADC12 aluminum alloy prices are expected to continue a sideways movement in the short term.

[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.]