Aluminum Alloy Futures Fluctuate at Highs, Short-Term Macro Tailwinds Boost the Market [SMM Cast Aluminum Alloy Morning Comment]

January 12 SMM Cast Aluminum Alloy Morning Comment

Futures: The aluminum alloy 2603 contract opened at 22,985 yuan/mt on Friday night, retreated after rapid rise, rose to a high of 23,300 yuan/mt after opening, then pulled back to a low of 22,945 yuan/mt and fluctuated rangebound, finally closed at 23,035 yuan/mt, up 0.22% from the previous close; the daily chart showed a medium-term rise, stabilizing above the moving average.

Spot-Futures Price Spread Report: According to SMM data, on January 9, the SMM ADC12 spot price theoretically stood at a premium of 740 yuan/mt to the closing price of the most-traded cast aluminum alloy contract (AD2603) at 10:15.

Warrant Report: SHFE data showed that on January 9, the total registered volume of cast aluminum alloy warrants was 69,922 mt, an increase of 185 mt from the previous trading day. By region, the total registered volume in Shanghai was 4,757 mt, unchanged from the previous trading day; Guangdong's total registered volume was 22,207 mt, unchanged; Jiangsu's total registered volume was 12,741 mt, an increase of 150 mt; Zhejiang's total registered volume was 23,577 mt, an increase of 35 mt; Chongqing's total registered volume was 5,919 mt, unchanged; Sichuan's total registered volume was 721 mt, unchanged.

Aluminum scrap side: Spot primary aluminum prices fluctuated rangebound on Friday compared to the previous trading day, with SMM A00 spot closing at 24,030 yuan/mt, while aluminum scrap market prices were generally flat. Baled UBC was quoted in the range of 17,750-18,150 yuan/mt (ex-tax), shredded aluminum tense scrap (priced based on aluminum content) was quoted in the range of 19,300-19,800 yuan/mt (ex-tax). Price difference side, on January 9, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was 3,836 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap was 2,761 yuan/mt. With aluminum prices hovering at highs, aluminum scrap was forced to follow the rise, resulting in a "nominal price without actual market" scenario. Scrap yards purchased cautiously to ensure capital chain safety, downstream buying sentiment was dampened, purchasing as needed. The aluminum scrap market is expected to hover at highs this week, with shredded aluminum tense scrap (priced based on aluminum content) mainstream range at 18,800-19,200 yuan/mt (ex-tax). High primary aluminum prices will provide bottom support for aluminum scrap, but poor cost transmission along the industry chain will limit upside room, while inventory pressure on the supply side and the fragmented scrap source structure are difficult to change in the short term.

Silicon metal side: Last week, SMM oxygen-blown #553 silicon in east China was at 9,200-9,300 yuan/mt, #421 silicon was at 9,500-9,800 yuan/mt, spot prices remained basically stable. The most-traded silicon contract fluctuated widely around 8,500-9,000 yuan/mt influenced by macro and polysilicon news, market sentiment towards the outlook was not positive, downstream users and traders mainly purchased low-priced materials in the market.

Overseas market: Current overseas ADC12 quotes temporarily stabilized in the range of $2,820-2,850/mt, import real-time profit remained around 500 yuan/mt.

Summary: Aluminum prices resumed their upward trend last Friday, with A00 aluminum rising by 30 yuan/mt to 24,030 yuan/mt, while SMM ADC12 prices held steady at 23,700 yuan/mt. Secondary aluminum producers generally kept their offers stable, though some raised quotes by 100–200 yuan/mt to recover from the previous afternoon's decline. Market transactions remained largely driven by rigid demand, with downstream buyers showing limited acceptance of high prices and a strong wait-and-see sentiment. The secondary aluminum market is currently influenced by a mix of bullish and bearish factors: cost support and tight supply provide a floor for prices, while weakening demand exerts downward pressure. Overall, the release of macro tailwinds is expected to provide a short-term boost to the market, and ADC12 prices are likely to continue fluctuating at high levels.

[Data Source Statement: Except for publicly available information, other data are derived by SMM based on public information, market communication, and SMM's internal database model, and are provided for reference only and do not constitute decision-making advice.]