ADC12's New High Momentum Slows Down, Aluminum Scrap Follows the Rise [SMM Cast Aluminum Alloy Morning Comment]

9.10 SMM Cast Aluminum Alloy Morning Comment

Futures: Overnight, the most-traded aluminum alloy 2611 contract opened at 23,725 yuan/mt, hit a high of 23,935 yuan/mt and a low of 23,725 yuan/mt, and closed at 23,875 yuan/mt, up 155, or 0.65%. Trading volume was 3,177, down 3,299 WoW, a notable contraction; open interest was 19,056, up 178 WoW, a slight increase. Prices hit a new high, but bulls' active buying momentum weakened, with new positions mostly passive turnover; at the new high, capital divergence widened, and bullish momentum slowed somewhat.

Basis Daily: According to SMM data, on September 9, SMM ADC12 spot price carried a theoretical premium of 670 yuan/mt over the 10:15 closing price of the most-traded cast aluminum alloy contract (AD2611).

Warrant Daily: SHFE data showed that on September 9, total registered warrants for cast aluminum alloy stood at 23,133 mt, down 89 mt from the previous trading day. By region, Shanghai registered 1,625 mt, unchanged from the previous trading day; Guangdong registered 1,521 mt, down 59 mt; Jiangsu registered 7,149 mt, unchanged; Zhejiang registered 10,225 mt, down 30 mt; Chongqing registered 2,165 mt, unchanged; Sichuan registered 359 mt, unchanged.

Aluminum scrap: Yesterday, SMM A00 aluminum price closed at 24,560 yuan/mt, up another 100 yuan/mt from the previous trading day. Aluminum scrap market prices rose broadly, with some regional grades catching up on the gains of the previous two days. On the price difference front, on September 9, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was about 2,636 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap was about 1,415 yuan/mt, widening further WoW. A substantive recovery in end-use demand still needs to be confirmed, wrought aluminum alloy scrap inventory digestion still takes time, and scrap utilization enterprises are likely to continue purchasing as needed and maintain low-inventory operations, with the pace of following price increases expected to remain slow. This week, the aluminum scrap market is expected to consolidate on a strong note with the price center edging slightly higher, with close attention needed on the pace of downstream order recovery.

Silicon metal: On September 9, SMM prices in east China were stable for non-oxygen blown #553, oxygen-blown #553, #521, #441, #421, #421 for silicone use, and #3303. Silicon prices in Guangdong, Huangpu Port, Tianjin, and Xinjiang were raised. Prices in south China, Kunming, northwest China, Sichuan, and Shanghai were stable.

Markets outside China: On the import side, overseas ADC12 offers remained steady in a narrow range of $3,050-3,200/mt. As domestic prices strengthened, immediate import losses narrowed further to within 300 yuan/mt.

Summary: The ADC12 market held up well overall yesterday, with the SMM ADC12 price rising by 100 yuan/mt from the previous day to 24,450 yuan/mt. The price adjustment was driven mainly by two factors: first, stronger cost support, as raw material prices stayed high and tax invoice policies tightened in some regions, keeping overall cost pressure on enterprises elevated; second, marginal demand improvement, with market orders recovering somewhat from earlier levels, though the extent was limited and the demand boost was moderate. Overall, the industry remains in a pattern led by cost drivers with mild demand recovery as a secondary factor. Enterprises showed a stronger willingness to hold prices firm, but room for further price rises still depends on how much seasonal demand actually materializes later.

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