5.12 SMM Cast Aluminum Alloy Morning Comment
Futures: The most-traded aluminum alloy 2607 contract fluctuated upward during the night session. The contract opened at 23,300 yuan/mt, reaching a high of 23,470 yuan/mt and a low of 23,285 yuan/mt, and closed at 23,345 yuan/mt, up 180 yuan/mt or 0.78% from the previous trading day's settlement price. After the night session opened, the contract retreated after rapid rise and moved sideways, closing slightly higher at the end of the session. Trading volume was 2,976 lots, and open interest stood at 12,904 lots, up 368 lots from the previous period, indicating slight capital inflows.
Basis daily report: According to SMM data, on May 11, the SMM ADC12 spot price's theoretical premium over the most-traded cast aluminum alloy contract (AD2606) at the 10:15 AM closing narrowed to 405 yuan/mt.
Industry updates: According to CAAM data, auto production and sales in April reached 2.575 million units and 2.526 million units respectively, down 11.7% and 12.9% MoM, and down 1.7% and 2.5% YoY. From January to April, auto production and sales reached 9.614 million units and 9.574 million units respectively, down 5.5% and 4.8% YoY. NEV production and sales in April reached 1.32 million units and 1.344 million units respectively, up 5.5% and 9.7% YoY. NEV sales accounted for 53.2% of total new vehicle sales. According to CAAM analysis, auto production and sales in April declined slightly compared to the same period last year, with cumulative production and sales declines narrowing further. Specifically, domestic demand still needed improvement and stimulus; exports continued to grow rapidly, providing stable support to the overall market. In detail, the passenger vehicle market declined, the commercial vehicle market maintained growth, and the NEV market operated steadily.
Aluminum scrap: On Monday, A00 aluminum prices rose 170 yuan/mt MoM from the previous trading day, and aluminum scrap market prices generally followed with increases of 100-200 yuan/mt. Shredded aluminum tense scrap (priced based on aluminum content) mainly traded in the range of 20,500-21,000 yuan/mt (tax exclusive). Imported zorba (Ningbo Port) traded in the range of 21,670-21,970 yuan/mt (tax inclusive). Price difference between A00 aluminum and aluminum scrap: on May 11, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was recorded at 2,643 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap was 1,998 yuan/mt. Supply side, the aluminum scrap shipment pace in May remained generally stable YoY from April, raw material prices swung wildly, and aluminum scrap yards generally held back from selling and held prices firm; high LME prices led import traders to adopt cautious strategies, and subsequent imports are expected to pull back. Demand side, the traditional off-season set in, with the operating rate of secondary aluminum producers pulling back slightly. Aluminum tense scrap purchasers purchased as needed with low inventory, while wrought aluminum alloy scrap was supported by secondary aluminum plate/sheet and strip operating rates but with limited momentum. Downstream buyers mainly covered rigid demand with strong wait-and-see sentiment. The off-season effect on the demand side continued, with downstream secondary aluminum enterprises cautiously watching the market. Procurement was mainly driven by small-lot restocking for rigid demand. The divergence pattern between aluminum tense scrap and wrought aluminum alloy scrap remained unchanged, with limited order growth. Caution was still warranted against market risks from aluminum price fluctuations and tight supply.
Silicon metal: On May 11, SMM east China non-oxygen blown #553 prices held stable; oxygen-blown #553 prices held stable; #521 prices held stable; #441 prices held stable; #421 prices held stable; #421 for silicone use prices held stable; #3303 prices held stable. Silicon prices in Kunming, Huangpu Port, Tianjin, and parts of north-west China were raised. Silicon prices in Xinjiang, Shanghai, and Sichuan held stable. Silicon (Si≥97%) prices also held stable.
Markets outside China: Imported ADC12 quotes remained at the high range of $3,320-3,400/mt, with instant import losses still exceeding 3,000 yuan/mt, and the theoretical import window remained closed.
Summary: On Monday, the ADC12 market was generally stable with slight rise. Most enterprises raised quotes by 100 yuan/mt, driven by the rebound in aluminum futures and rising aluminum scrap raw material costs. Although market sentiment recovered somewhat, weak downstream demand remained a key constraining factor, leading enterprises to adopt a cautious pricing stance and mainly follow the market trend. ADC12 prices are expected to move sideways in the near term amid the interplay between cost support and weak demand.
[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.]
