Overnight cast aluminum alloy the most-traded contract held up well spot cargo increased rapidly [SMM cast aluminum alloy morning comment]

12.18 SMM Cast Aluminum Alloy Morning Comment

Futures: The most-traded cast aluminum alloy contract 2602 opened at 21,100 yuan/mt overnight, hit a high of 21,195 yuan/mt and a low of 21,050 yuan/mt, and finally closed at 21,170 yuan/mt, up 125 yuan/mt, or 0.59%, from the previous trading day. Bears increased their positions. Spot-Futures Price Spread Report: According to SMM data, on December 17, the spot price of SMM ADC12 theoretically traded at a premium of 630 yuan/mt to the most-traded cast aluminum alloy contract (AD2602) at the 10:15 closing price.

Warrant Report: SHFE data showed that on December 17, the total warrant registration volume for cast aluminum alloy was 69,425 mt, down 208 mt from the previous trading day. Among them, the total registration volume in Shanghai was 4,757 mt, unchanged from the previous trading day; the total registration volume in Guangdong was 21,744 mt, unchanged from the previous trading day; the total registration volume in Jiangsu was 12,050 mt, down 30 mt from the previous trading day; the total registration volume in Zhejiang was 24,535 mt, up 211 mt from the previous trading day; the total registration volume in Chongqing was 5,919 mt, down 389 mt from the previous trading day; the total registration volume in Sichuan was 420 mt, unchanged from the previous trading day.

Aluminum Scrap: Yesterday, the spot price of primary aluminum edged down slightly from the previous trading day, with SMM A00 spot aluminum closing at 21,750 yuan/mt, while the aluminum scrap market followed with modest gains. Baled UBC was quoted in a range of 16,250-16,750 yuan/mt (ex-tax), and shredded aluminum tense scrap (priced based on aluminum content) was quoted in a range of 18,000-18,550 yuan/mt (ex-tax). The price difference between A00 aluminum and shredded aluminum tense scrap closed at 1,914 yuan/mt, and the price difference between A00 aluminum and bare bright aluminum wire in Jiangsu was 868.1 yuan/mt. The aluminum scrap market is expected to hover at highs this week, with the mainstream range for shredded aluminum tense scrap (priced based on aluminum content) at 18,200-18,900 yuan/mt (ex-tax). The tight supply pattern is hard to change, with constraints on imports and recycling persisting, providing a floor for prices. The tug-of-war between sellers and buyers continues, and it is necessary to closely track fluctuations in primary aluminum, environmental protection policies, and downstream procurement pace, while being wary of the risk of a pullback from highs.

Silicon Metal: On December 17, SMM non-oxygen blown #553 in east China was at 9,100-9,300 yuan/mt; oxygen-blown #553 was at 9,100-9,300 yuan/mt; #521 was at 9,300-9,500 yuan/mt; #441 was at 9,300-9,500 yuan/mt; #421 was at 9,500-9,800 yuan/mt; #421 for silicone use was at 9,800-10,200 yuan/mt; and #3303 was at 10,200-10,500 yuan/mt. Prices in Kunming, Huangpu Port, Tianjin, Xinjiang, Shanghai, Sichuan, and north-west China held steady.

Overseas Market: Current overseas ADC12 quotes held steady at $2,620-2,640/mt, with the immediate import loss in the range of 200-400 yuan/mt.

Inventory: According to SMM statistics, on December 17, the total daily social inventory of secondary aluminum alloy ingots in Foshan, Ningbo, and Wuxi was 48,598 mt, down 223 mt from the previous trading day and down 450 mt WoW (December 10).

Summary: On Wednesday, the SMM A00 aluminum price rebounded by 120 yuan/mt to 21,750 yuan/mt, and the ADC12 price also rose by 50 yuan/mt to 21,650 yuan/mt. The rebound in aluminum prices drove a widespread increase of 100 yuan/mt in the secondary aluminum market, while some enterprises chose to hold steady and wait. Currently, raw material supply is generally tight, and aluminum scrap traders quickly raised prices following the aluminum price rebound, prompting secondary aluminum plants to adjust prices upward due to cost pressures. However, increased volatility in aluminum prices has intensified downstream wait-and-see sentiment, and demand shows signs of marginal slowdown, with overall market trading being sluggish.

Overall, cost side support underpins the price floor, but weakening demand and fluctuating aluminum prices jointly suppress purchasing enthusiasm. It is expected that the ADC12 price will continue to fluctuate at highs in the short term. [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 do not constitute decision-making advice.]