Weak Demand Restricts Price Rise, Enterprises Adopt a Wait-and-See Attitude [SMM Cast Aluminum Alloy Morning Comment]

1.14 SMM Cast Aluminum Alloy Morning Comment

Futures: The aluminum alloy 2603 contract closed at 23,580 yuan/mt, up 415 yuan/mt (+1.79%) from the previous value. During the session, it hit a high of 23,765 yuan/mt and a low of 23,260 yuan/mt. The price broke through the previous high of 23,480 yuan/mt, with resistance above at 23,940 yuan/mt and support below at 22,180 yuan/mt. Trading volume was 9,696 lots (+25), while open interest was 22,081 lots (-18). The pattern of rising prices with increased volume but slightly decreased open interest reflects strong bullish momentum currently, yet also shows emerging divergence in capital. The VR indicator is at a high level, coupled with declining open interest, warranting caution against a pullback triggered by profit-taking by bulls. If the price retraces to test 23,480 yuan/mt, watch for the effectiveness of support; a break above 23,940 yuan/mt could open further upside room.

Basis Daily: According to SMM data, on January 13, the SMM ADC12 spot price was at a theoretical premium of 670 yuan/mt to the closing price of the cast aluminum alloy most-traded contract (AD2603) at 10:15.

Warrant Daily: SHFE data showed that on January 13, the total registered warrant volume for cast aluminum alloy was 68,861 mt, a decrease of 424 mt from the previous trading day. By region: Shanghai total registered volume was 4,757 mt, unchanged from the previous day; Guangdong total registered volume was 22,024 mt, down 92 mt; Jiangsu total registered volume was 12,438 mt, down 60 mt; Zhejiang total registered volume was 22,942 mt, down 332 mt; Chongqing total registered volume was 5,979 mt, up 60 mt; Sichuan total registered volume was 721 mt, unchanged.

Aluminum Scrap Side: On Tuesday, spot primary aluminum edged down slightly compared to the previous trading day, with the SMM A00 spot price closing at 24,300 yuan/mt. Aluminum scrap market prices were generally flat. Baled UBC was quoted in a range of 17,700-18,100 yuan/mt (ex-tax); shredded aluminum tense scrap (priced based on aluminum content) was quoted in a range of 19,450-19,950 yuan/mt (ex-tax). Regarding the price difference between primary aluminum and scrap: on January 13, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was 4,046 yuan/mt; the price difference between A00 aluminum and shredded aluminum tense scrap was 2,864 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) forecast at 18,800-19,200 yuan/mt (ex-tax). The tug-of-war between sellers and buyers continues overall; closely track primary aluminum trends, downstream production halts progress, and pre-holiday trading activity, while remaining vigilant against high-level pullback risks.

Silicon Metal Side: On January 13, 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, Tianjin, Shanghai, Xinjiang, Sichuan, and north-west China remained stable.

Summary: The price center of aluminum pulled back slightly, with A00 prices down by 40 yuan/mt to 24,300 yuan/mt, while SMM ADC12 held steady at 23,950 yuan/mt. In the secondary aluminum market yesterday, price adjustment willingness was mediocre, with most enterprises maintaining a wait-and-see stance. As aluminum prices remained above 24,000 yuan, the market continued to exhibit a "nominal price without actual transactions" characteristic, with actual transactions dominated by rigid demand. Downstream acceptance of high prices was limited, and wait-and-see sentiment remained strong. From the perspective of market drivers, cost support and a tight supply-demand pattern provided a floor for aluminum prices, but weak demand-side conditions constrained further price rises. Overall, buoyed by short-term macro tailwinds, ADC12 prices are expected to hover at highs. Currently, bullish and bearish factors are intertwined in the market, requiring close attention to changes in the supply-demand pattern and macro policy guidance.

[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 for reference only, not constituting decision-making advice.]