The Most-Traded Aluminum Alloy Contract Declined in Volatile Overnight Trading, Pre-Holiday Stockpiling Sentiment Remained Weak [SMM Cast Aluminum Alloy Morning Comment]

4.28 SMM Cast Aluminum Alloy Morning Comment

Futures: The aluminum alloy AD2606 contract fluctuated downward overall during the night session, opening at 23,350 yuan/mt, reaching a high of 23,375 yuan/mt, hitting a low of 23,140 yuan/mt, and closing at 23,175 yuan/mt, down 175 yuan/mt from the settlement price, a decline of 0.75%. During the night session, prices opened higher but came under pressure and weakened, pulling back gradually. Open interest decreased by 332 lots, with trading volume at 2,181. The MACD indicator maintained a bearish pattern, and short-term downward pressure persists.

Spot-futures price spread daily report: According to SMM data, on April 27, the SMM ADC12 spot price had a theoretical premium of 535 yuan/mt over the most-traded cast aluminum alloy contract (AD2606) closing price at 10:15 AM.

Warrant daily report: SHFE data showed that on April 27, the total registered warrants for cast aluminum alloy stood at 31,299 mt, an increase of 987 mt from the previous trading day. Specifically, Shanghai had a total of 1,822 mt registered (unchanged from the previous trading day); Guangdong had 10,969 mt (down 60 mt); Jiangsu had 3,987 mt (up 266 mt); Zhejiang had 8,872 mt (up 181 mt); Chongqing had 4,143 mt (up 600 mt); Sichuan had 1,506 mt (unchanged).

Aluminum scrap: Spot primary aluminum prices rose 60 yuan/mt from the previous trading day, while aluminum scrap prices remained largely stable with minor adjustments. Price difference between A00 aluminum and aluminum scrap: On April 27, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was recorded at 2,768 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap was 2,015 yuan/mt. Overall, supply-side policy constraints are unlikely to ease in the short term, with tight compliant supply and holders holding back from selling providing support, while the increasing probability of a pullback in imports going forward will further exacerbate tight supply conditions. Demand side, the divergence between wrought aluminum alloy scrap and aluminum tense scrap downstream remained unchanged, and aluminum price fluctuations along with a lack of orders continued to suppress purchase willingness. In the short term, the outlook for the US-Iran conflict remains uncertain, and tight compliant supply combined with expectations of declining aluminum scrap imports is expected to support aluminum scrap prices to hold up well.

Silicon metal: On April 27, SMM east China non-oxygen blown #553 was stable WoW; oxygen-blown #553 was stable WoW; #521 was stable WoW; #441 was stable WoW; #421 was stable WoW; #421 for silicone use was stable WoW; #3303 was stable WoW. Silicon prices in some areas including Huangpu Port, Tianjin, Northwest China, Xinjiang, Sichuan, Kunming, and Shanghai remained stable.

Markets outside China: Currently, ex-China ADC12 was quoted at $3,320-3,380/mt, with instant import losses continuing to stay above 2,000 yuan, and the import window remained closed.

Summary: On Monday, the SMM ADC12 price was flat from the previous trading day at 24,100 yuan/mt. Cost side, aluminum price fluctuations narrowed, offering limited price support. Demand side, although the Labour Day holiday is approaching, downstream orders shrank, leading to low stockpiling willingness, a weakening procurement pace, and persistently sluggish market transactions. Enterprises showed slight divergence in price adjustment willingness, but most adopted a wait-and-see approach with stable pricing in actual execution. In the short term, ADC12 prices are expected to move sideways on the weak side, with clearly insufficient upward momentum ahead of the holiday.

[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.]