Aluminum alloy futures closed up 1.64% overnight as bullish sentiment heats up [SMM Cast Aluminum Alloy Morning Comment]

4.16 SMM Cast Aluminum Alloy Morning Comment

Futures: The aluminum alloy 2606 contract opened at 23,755 yuan/mt during the night session and closed sharply higher at 24,130 yuan/mt. In the early stage of the night session, prices moved sideways around the opening level with a steady trend. Mid-session, bulls pushed prices up rapidly, with futures surging to the intraday high of 24,200 yuan/mt before pulling back slightly for consolidation. Prices remained above the VWAP line throughout the session, maintaining a solid bullish structure. The daily chart closed with a 1.64% bullish candlestick, with prices holding above moving average support and the KD indicator rising in tandem. Both trading volume and open interest increased simultaneously, with volume expanding and open interest rising significantly. Futures staged a strong recovery from prior losses, and bullish sentiment on the futures market warmed notably.

Basis daily report: According to SMM data, on April 15, the SMM ADC12 spot price theoretical premium over the most-traded cast aluminum alloy contract (AD2606) closing price at 10:15 AM narrowed to 725 yuan/mt.

Warrant daily report: SHFE data showed that on April 15, total registered warrants for cast aluminum alloy stood at 30,496 mt, an increase of 62 mt from the previous trading day. By region, Shanghai had a total of 1,822 mt registered, down 90 mt from the previous trading day; Guangdong had 11,786 mt, down 60 mt; Jiangsu had 3,909 mt, down 29 mt; Zhejiang had 8,170 mt, up 151 mt; Chongqing had 3,603 mt, unchanged; Sichuan had 1,206 mt, unchanged.

Aluminum scrap: On Wednesday, spot primary aluminum prices were flat from the previous trading day, and the aluminum scrap market remained largely stable overall, with minor adjustments in select regions and grades. The tightening regulatory stance on the "reverse invoicing" policy persisted, keeping compliance costs in the aluminum scrap recycling segment elevated, and actually available invoiced supply remained tight. Demand side, shipments of aluminum tense scrap and wrought aluminum alloy scrap diverged further. For aluminum tense scrap materials such as shredded aluminum tense scrap and ADC12 aluminum shavings, downstream scrap utilization enterprises including secondary alloy producers mostly maintained purchasing as needed with low inventory operations. For wrought aluminum alloy scrap materials such as baled UBC and 5-series/3-series plate off-cuts, downstream secondary plate and aluminum plate/sheet and strip enterprises were in peak production season, with relatively higher stockpiling enthusiasm. However, overall, high price levels combined with wild swings in aluminum prices continued to suppress procurement enthusiasm among scrap utilization enterprises. Price difference between A00 aluminum and aluminum scrap: the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was recorded at 3,023 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap was 1,733 yuan/mt.

Silicon metal: On April 15, SMM east China non-oxygen blown #553 was flat from the previous day; oxygen-blown #553 was flat from the previous day; #521 was flat from the previous day; #441 was flat from the previous day; #421 was flat from the previous day; #421 for silicone use was flat from the previous day; #3303 was flat from the previous day. Silicon prices were raised by individual sellers in the Huangpu Port and Tianjin areas.

Markets outside China: Currently, ex-China ADC12 was quoted at $3,320-3,380/mt, with instant import losses continuing at around 2,000 yuan.

Summary: On Wednesday, the ADC12 market remained largely stable overall. Most enterprises adopted a wait-and-see stance with stable pricing, influenced by the convergence of aluminum price fluctuations, while a few enterprises slightly lowered their quotes amid weakening market sentiment and insufficient demand support. Overall, cost-side drivers were limited, demand-side performance was weak, transactions showed no notable improvement, and a strong wait-and-see atmosphere prevailed. In the short term, ADC12 prices may continue to move sideways, and attention should still be paid to aluminum price trends and changes in downstream procurement pace.

[Data source disclaimer: Data other than publicly available information is derived from public information, market communication, and SMM's internal database models, processed by SMM for reference only and does not constitute decision-making advice.]