8.2 SMM Cast Aluminum Alloy Morning Comment
Futures: Overnight, the most-traded AD2610 contract opened at 22,905 yuan/mt. After a quick dip following the opening, buying gradually entered and prices fluctuated higher, hitting an intraday high of 23,055 yuan/mt before closing at 23,035 yuan/mt, up 0.41%. On the 4-hour chart, the contract stopped falling and formed a bullish candlestick, signaling a repair rally after the recent sharp decline. Technical indicators turned slightly upward from low levels, easing bearish sentiment, and the trend shifted from one-sided weakness to consolidation and repair at lows.
Spot-Futures Price Spread Daily: According to SMM data, on August 19, the theoretical premium of the SMM ADC12 spot price against the closing price at 10:15 AM of the most-traded AD2610 contract was 985 yuan/mt.
Warrant Daily: SHFE data showed that as of August 19, total registered warrants for cast aluminum alloy stood at 20,390 mt, down 30 mt from the previous trading day.
Aluminum Scrap: On Wednesday, SMM A00 spot aluminum prices closed at 23,670 yuan/mt, down another 230 yuan/mt from the previous trading day. China's aluminum scrap market prices broadly followed the decline, with some sidelined regions catching up with the drop. Against the backdrop of sustained high primary aluminum prices, aluminum scrap fluctuations remained relatively limited, and the price transmission mechanism was hindered. However, with the recent pullback in primary aluminum, the resilience of aluminum scrap offered an opportunity for the price difference between A00 aluminum and aluminum scrap to narrow. Additionally, on the supply side, policy constraints from "reverse invoicing" continued, and the scarcity of compliant, invoiced aluminum scrap provided bottom support for prices. The current high-temperature holiday period has not yet ended, and downstream cast aluminum alloy enterprises' operating rates remain low, with order recovery still needing time. Scrap utilization enterprises are likely to continue purchasing as needed and maintain low inventory strategies, while any concentrated restocking still requires waiting. Notably, the price difference between A00 aluminum and shredded aluminum tense scrap has been gradually widening, and the cost advantage of aluminum scrap over primary aluminum has somewhat recovered. The near-term aluminum scrap market is expected to continue to move sideways at elevated levels, with weak end-use demand remaining the core factor suppressing prices.
Silicon Metal: On August 19, SMM non-oxygen blown #553 in east China was raised by 50 yuan/mt; oxygen-blown #553 was raised by 50 yuan/mt; #521 was raised by 50 yuan/mt; #441 was raised by 50 yuan/mt; #421 prices were stable; #421 for silicone use was stable; and #3303 was stable.
Markets Outside China: Current ADC12 offers outside China are at $3,070-3,190/mt, with an immediate import loss of around 1,200 yuan/mt.
Summary: On Wednesday, the ADC12 market showed overall weakness, with most enterprises lowering prices by about 100 yuan/mt and a few temporarily maintaining stability. The price weakness was mainly driven by declines in futures and primary aluminum prices, while end-use demand remained in the off-season, with limited purchasing enthusiasm. The spot market lacked clear upward momentum. However, the pullback in raw materials such as aluminum scrap was relatively limited, providing some support on the cost side. The overall pattern remained one of "weak futures, subdued demand, and cost acting as a floor."
[Data Source Statement: Except for publicly available information, all other data are based on public information, market communication, and SMM's internal database models, processed by SMM, and are for reference only. They do not constitute decision-making advice.]
![Inventory destocking continues to support the futures, making it difficult for aluminum prices to break the consolidation range in the short term [SMM Aluminum Morning Briefing]](https://imgqn.smm.cn/usercenter/XLWyP20251217171654.jpg)
