12.15 SMM Cast Aluminum Alloy Morning Comment
Futures: On Friday night, the most-traded cast aluminum alloy 2602 contract opened at 21,080 yuan/mt, surged to a high of 21,170 yuan/mt, then quickly fell to a low of 20,630 yuan/mt, and finally closed at 20,875 yuan/mt, down 240 yuan/mt or 1.14% WoW. Bears dominated the increase in positions.
Spot-Futures Price Spread Report: According to SMM data, on December 12, the spot price of SMM ADC12 was at a theoretical premium of 575 yuan/mt to the closing price of the most-traded cast aluminum alloy contract (AD2602) at 10:15.
Warrant Report: SHFE data showed that on December 12, the total registered warrants for cast aluminum alloy were 69,147 mt, up 152 mt WoW. The breakdown was as follows: Shanghai (4,757 mt, up 0 mt WoW), Guangdong (21,652 mt, up 152 mt WoW), Jiangsu (11,988 mt, up 0 mt WoW), Zhejiang (24,022 mt, up 0 mt WoW), Chongqing (6,308 mt, up 0 mt WoW), and Sichuan (420 mt, up 0 mt WoW).
Aluminum Scrap: On Friday, the spot price of primary aluminum rose WoW, with SMM A00 spot aluminum closing at 22,050 yuan/mt, and the aluminum scrap market followed the increase. Baled UBC was quoted at 16,450-16,950 yuan/mt (ex-tax), while shredded aluminum tense scrap (priced based on aluminum content) was quoted at 18,300-18,850 yuan/mt (ex-tax). The price difference between A00 aluminum and shredded aluminum tense scrap closed at 1,999 yuan/mt, and that for Jiangsu bare bright aluminum wire was 899.4 yuan/mt. The aluminum scrap market is expected to hover at highs this week, with shredded aluminum tense scrap (priced based on aluminum content) mainly in the range of 18,500-19,200 yuan/mt (ex-tax). The tug-of-war between sellers and buyers continues, and close attention should be paid to fluctuations in primary aluminum, environmental protection policies, and downstream procurement pace, while being alert to the risk of a high-level correction.
Silicon Metal: On Friday, oxygen-blown #553 silicon in east China was at 9,100-9,300 yuan/mt, and #421 silicon was at 9,500-9,800 yuan/mt. The most-traded SI contract closed at 8,435 yuan/mt. On Friday, futures prices saw a slight upward correction but remained at relatively low levels, and silicon enterprises were not active in selling or offering.
Overseas Market: Currently, overseas ADC12 quotes are steady at $2,620-2,640/mt. Due to the rapid rebound in domestic prices, the immediate import loss has narrowed to around 200 yuan/mt.
Inventory: According to SMM statistics, on December 15, the daily social inventory of secondary aluminum alloy ingots in Foshan, Ningbo, and Wuxi totaled 48,862 mt, down 6 mt WoW and down 356 mt compared to Monday (December 8).
Summary: Last Friday, the SMM A00 aluminum spot price rose by 160 yuan/mt to 22,020 yuan/mt, while the ADC12 price was raised by another 150 yuan/mt to 21,750 yuan/mt. Aluminum prices have once again broken above the 22,000 yuan/mt threshold, and raw material quotations have climbed rapidly, prompting secondary aluminum plants to continue adjusting prices, with market offers generally rising by 100-200 yuan/mt compared to the previous day. Recent sharp fluctuations in aluminum prices have intensified downstream wait-and-see sentiment, leading to cautious procurement by die-casting enterprises and generally moderate market activity. Although year-end terminal volume push has provided some demand support, demand is already showing signs of marginal weakening. Supply side, constrained by both environmental protection policy controls and cost pressures, the operating rate in the secondary aluminum industry has experienced a phased decline. Overall, the current secondary aluminum alloy market is characterized by a tug-of-war between bullish and bearish factors: on one hand, the tight supply-demand balance for aluminum scrap persists, and although cost support has weakened somewhat, it still provides a fundamental floor for the market; on the other hand, marginal weakening in demand combined with aluminum prices fluctuating at highs jointly suppresses downstream procurement enthusiasm, while the decline in industry operating rates results in an overall tight supply-demand balance in the market. ADC12 prices are expected to continue moving sideways at high levels in the short term, with close attention needed on aluminum price trends, aluminum scrap supply conditions, and actual changes in downstream orders.
[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 constituting decision-making advice.]
