Aluminum Prices Surge to High Levels, Driving Active Follow-Up Increases in Aluminum Alloy Prices [SMM Cast Aluminum Alloy Morning Comment]

12.25 SMM Cast Aluminum Alloy Morning Comment

Futures: The most-traded cast aluminum alloy 2601 contract opened at 21,300 yuan/mt overnight, rose to a high of 21,485 yuan/mt before pulling back, and finally closed at 21,185 yuan/mt, down 0.24%. Trading volume was 21,088 lots (down 1,690 lots), and open interest was 14,280 lots (down 2,936 lots), reflecting increased short-term wait-and-see sentiment and bulls actively reducing positions to exit. In the KDJ indicator, K=69.65, D=68.88, J=71.18, near the overbought zone, indicating short-term correction pressure; the VR indicator was 169.88, showing moderate market activity but some weakening in bullish momentum.

Spot-Futures Price Spread Report: According to SMM data, on December 24, the SMM ADC12 spot price showed a theoretical premium of 650 yuan/mt over the closing price of the most-traded cast aluminum alloy contract (AD2602) at 10:15.

Warrant Report: SHFE data showed that on December 24, the total registered warrant volume for cast aluminum alloy was 70,161 mt, down 1 mt from the previous trading day. Among them, the total registered volume in Shanghai was 4,757 mt, unchanged from the previous trading day; Guangdong's total registered volume was 22,510 mt, unchanged from the previous trading day; Jiangsu's total registered volume was 11,931 mt, down 60 mt from the previous trading day; Zhejiang's total registered volume was 24,623 mt, up 59 mt from the previous trading day; Chongqing's total registered volume was 5,919 mt, unchanged from the previous trading day; Sichuan's total registered volume was 420 mt, unchanged from the previous trading day.

Aluminum Scrap Side: On Wednesday, spot primary aluminum prices rebounded from the previous trading day, with SMM A00 spot closing at 22,030 yuan/mt, and the overall aluminum scrap market followed the increase. Baled UBC was quoted at 16,450-16,950 yuan/mt (ex-tax), and shredded aluminum tense scrap (priced based on aluminum content) was quoted at 18,300-18,800 yuan/mt (ex-tax). Baled UBC prices were raised by 100 yuan/mt WoW, and aluminum tense scrap prices followed with an increase of 200 yuan/mt. Overall, the tug-of-war between sellers and buyers in the aluminum scrap market is expected to continue this week, with close attention needed on primary aluminum price fluctuations, the implementation of environmental protection-driven production restrictions, and changes in downstream enterprises' procurement pace, while remaining cautious of high-level pullback risks.

Silicon Metal Side: On December 24, SMM east China non-oxygen blown #553 was at 9,100-9,300 yuan/mt; oxygen-blown #553 at 9,200-9,300 yuan/mt; #521 at 9,300-9,500 yuan/mt; #441 at 9,300-9,500 yuan/mt; #421 at 9,500-9,800 yuan/mt; #421 for silicone use at 9,800-10,200 yuan/mt; #3303 at 10,200-10,500 yuan/mt. Silicon prices in Kunming, Huangpu Port, Shanghai, Sichuan, and north-west China held steady.

Overseas Market: On the import side, overseas ADC12 quotes held steady at $2,630-2,650/mt. Driven by domestic price increases and the strengthening yuan, the immediate import profit and loss rebounded above the 50 mark, theoretically opening the import window.

Summary: In yesterday's spot market, SMM A00 aluminum ingot prices surged by 160 yuan/mt to 22,030 yuan/mt, while ADC12 prices rose rapidly by 150 yuan/mt to 21,950 yuan/mt. Aluminum prices climbed back above 22,000 yuan/mt, driving active increases in secondary aluminum prices. Currently, raw material supply is relatively tight, compounded by secondary aluminum enterprises entering a stockpiling phase, which has boosted aluminum scrap demand and led to rapid price increases, pushing up ADC12 costs. Additionally, copper prices hit a new high of 94,690 yuan/mt, driving significant price increases for aluminum tense scrap and high-copper-content alloy ingots. However, demand-side momentum weakened marginally, resulting in overall sluggish market transactions. In terms of supply, factors such as environmental protection-related controls or losses continue to exert downward pressure. Overall, cost support and tightening supply have solidified the price floor, but slowing demand and aluminum prices fluctuating at highs are suppressing downstream purchase willingness. ADC12 prices are expected to maintain a fluctuating trend at highs 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 intended as decision-making advice.]