Aug 27 SMM Cast Aluminum Alloy Morning Comment
Futures: The most-traded aluminum alloy 2610 futures contract opened overnight at 23,160 yuan/mt, hit a high of 23,250 yuan/mt, a low of 23,030 yuan/mt, and closed at 23,220 yuan/mt, up 90, or +0.39%. Trading volume was 3,480 lots, up 8 lots from the prior session, nearly flat with moderate trading activity. Open interest was 13,225 lots, down 1,225 lots from the prior session, continuing to decline. During the rebound, old bulls took profit and exited, with no significant new long positions entering, indicating a repair in the stock-based game.
Basis Daily Report: According to SMM data, on August 26, the SMM ADC12 spot price quoted a theoretical premium of 740 yuan/mt over the 10:15 closing price of the most-traded cast aluminum alloy contract (AD2610).
Warrant Daily Report: SHFE data showed that on August 26, total registered cast aluminum alloy warrants stood at 21,411 mt, up 1,264 mt from the previous trading day. Among which, the total registered volume in Shanghai was 1,625 mt, flat; Guangdong was 1,368 mt, up 180 mt; Jiangsu was 6,759 mt, up 813 mt; Zhejiang was 8,590 mt, up 271 mt; Chongqing was 2,284 mt, flat; Sichuan was 785 mt, flat.
Aluminum scrap: Yesterday, SMM A00 spot aluminum price closed at 23,870 yuan/mt, up 130 yuan/mt from the prior session, with domestic scrap aluminum prices broadly tracking the increase. Regarding price spreads, on August 26, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was 2,354 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap was 1,133 yuan/mt. The scrap aluminum market this week is expected to continue a narrow sideways trend, capped by demand and supported by costs. Currently at the tail end of the traditional off-season, downstream end-use orders are unlikely to see a substantial pickup. Scrap utilization enterprises continue to purchase as needed, with cautious procurement sentiment. The front-loading effect for the peak season is not yet evident, and the arrival of subsequent orders requires monitoring. The mainstream operating range for shredded aluminum tense scrap (priced based on aluminum content) is expected around 19,900-20,700 yuan/mt.
Silicon metal: On August 26, SMM east China non-oxygen blown #553 prices were flat; oxygen-blown #553 prices were flat; #521 prices were flat; #441 prices were flat; #421 prices were flat; #421 silicone-grade prices were flat; #3303 prices were flat. Prices for certain silicon grades in Guangdong, Tianjin, and northwest China were raised. Silicon prices in south China, Kunming, Huangpu port, Xinjiang, Sichuan, and Shanghai were flat.
Markets outside China: On the import front, overseas ADC12 offers were steady at $3,050-3,190/mt, with the immediate import loss holding around 900 yuan/mt.
Summary: Yesterday, ADC12 market offers were broadly raised slightly, with the SMM ADC12 price up 50 yuan/mt from the prior trading day to 23,950 yuan/mt. The increase was mainly driven by stronger aluminum prices and improved market sentiment, with enterprises raising offers in line with cost and market movements, although the overall magnitude was restrained. End-use demand remains relatively weak, with downstream purchases largely need-based, limiting acceptance of higher prices. Some enterprises opted to wait and see after earlier price adjustments, keeping the overall market uptrend cautious. In summary, short-term ADC12 prices are still supported by costs, but demand has not yet formed a clear upward driver. The room for further price gains and their sustainability will depend on aluminum price trends and downstream demand recovery.
[Data source statement: Data other than publicly available information are based on public information, market communication, and SMM’s internal database models, processed by SMM. They are for reference only and do not constitute investment advice.]
