China's Cast Aluminum Alloy Inventory Rises for Fifth Week, Demand Improvement Slow

Expectations for the September peak season diverged from the sluggish reality. With aluminum prices remaining high, downstream processing enterprises in central China continued to procure only small volumes as needed, stockpiling cautiously and focusing on reducing in-factory inventory. Only trading firms engaging in both spot and futures market made large purchases, while major suppliers showed limited willingness to sell due to the deep discount. Ultimately, actual transaction prices in the central China market ranged from a discount of 150-180 yuan/mt against the 09 contract.

[Low inventory supports aluminum prices to consolidate at highs; peak-season recovery pace awaits verification] Overall, aluminum prices are expected to consolidate on a strong note in the short term.

[SMM cast aluminum alloy morning comment: ADC12's new high momentum slows down, aluminum scrap follows the rise] Yesterday, the ADC12 market held up well overall, with SMM ADC12 prices rising by 100 yuan/mt from the previous day to 24,450 yuan/mt. The price adjustment momentum mainly came from two aspects: first, cost support strengthened, as raw material prices stayed high and tax invoice policies tightened in some regions, enterprises' overall cost pressure continued to rise; second, demand improved marginally, with market orders recovering somewhat from the earlier period, but the extent was limited, and the demand boost was moderate. Overall, the industry remains in a pattern driven mainly by costs, supplemented by mild demand recovery. Enterprises' willingness to hold prices firm has increased somewhat, but room for further price rises still depends on the actual realization of peak-season demand later on.