Overnight Cast Aluminum Bottomed Out, Traded in a Narrow Range, with Volume Shrinking and Upward Momentum Insufficient [SMM Cast Aluminum Alloy Morning Comment]

Jun. 9 SMM Cast Aluminum Alloy Morning Comment

Futures: The most-traded AD2608 contract opened at 23,065 yuan/mt overnight, dipped to a low of 22,915 yuan/mt during the session, and closed at 22,995.5 yuan/mt, edging up 10 yuan/mt or 0.04%. Trading volume was 2,350, down 1,637 from the prior session. Open interest rose slightly by 13 lots to 14,808. The intraday trend initially weakened to a low of 22,915 before oscillating back, consolidating sideways in a narrow range above the 22,960 flat price level. The RSI value did not enter overbought or oversold territory; DKX B line stood at 23,123.75 and D line at 23,172.78, with price running below both lines. Near-term pressure is evident, with upside attempts lacking momentum and limited support at lower levels.

Spot-Futures Spread Daily: According to SMM data, the theoretical premium of SMM ADC12 spot price over the 10:15 closing price of the most-traded AD2607 contract widened to 885 yuan/mt on Jun. 8.

Warrant Daily: SHFE data showed that total registered cast aluminum alloy warrants stood at 39,314 mt on Jun. 8, up 90 mt from the previous trading day. By region: Shanghai totaled 2,897 mt, unchanged; Guangdong totaled 9,315 mt, down 274 mt; Jiangsu totaled 7,619 mt, unchanged; Zhejiang totaled 12,481 mt, up 424 mt; Chongqing totaled 6,007 mt, down 60 mt; Sichuan totaled 995 mt, unchanged.

Aluminum Scrap: SMM A00 price tumbled 200 yuan/mt to 24,000 yuan/mt yesterday, dragging aluminum scrap market prices broadly lower. For price differences, the spread between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was 2,390 yuan/mt on Jun. 8, and the price difference between A00 aluminum and shredded aluminum tense scrap was 1,960 yuan/mt. Aluminum scrap prices are expected to hold up well at high levels this week. Tight supply of compliant duty-paid cargoes continues to floor scrap prices. The lagging contraction effect of imported aluminum scrap has yet to fully play out, with port arrivals set to run at low levels; supply replenishment from outside China is limited as overseas market outperforms domestic market. Meanwhile, as the off-season deepens, downstream scrap utilization enterprises face worrying order sustainability. They maintain low inventories and purchase as needed, making a notable pickup in procurement sentiment unlikely.

Silicon Metal: On Jun. 8, SMM prices in east China were flat for non-oxygen blown #553, oxygen-blown #553, #521, #441, #421, #421 silicone-grade, and #3303. Some silicon prices in Huangpu and Tianjin were raised. Prices were flat in Kunming, the northwest region, Sichuan, Shanghai, and Xinjiang.

Markets Outside China: Imported ADC12 offers pulled back slightly to $3,370–3,430/mt, but the immediate import loss remained around 3,287 yuan/mt, keeping the theoretical import window closed.

Summary: The tone of price adjustments in the secondary aluminum alloy market was cautious on Monday. SMM ADC12 price was flat at 23,900 yuan/mt. Pressured by falling aluminum and futures prices, some enterprises followed the market and cut prices by 100 yuan/mt. However, most held steady and stayed on the sidelines, considering that the cost side remained somewhat supported by aluminum scrap, with raw material prices adjusting relatively little. In the short term, tight invoice availability and stricter compliance oversight on the cost side are unlikely to ease soon, keeping raw material and tax costs high. On the supply side, if invoice shortages persist, industry-wide production cuts may deepen. Coupled with low social inventories and a closed import window, spot circulation will hardly expand effectively. On the demand side, persistent weakness caps price gains. ADC12 downside room is limited in the near term, but upside attempts also lack effective demand-side follow-through; prices are expected to move sideways overall.

[Data Disclaimer: Except for publicly available information, all other data are processed by SMM based on public information, market communication, and SMM’s internal database models. They are for reference only and do not constitute decision-making advice.]