Sep 21 SMM cast aluminum alloy morning comment
Futures: Overnight, the most-traded aluminum alloy 2611 contract opened at 23,755 yuan/mt, hit a high of 23,810 yuan/mt and a low of 23,710 yuan/mt, and closed at 23,790 yuan/mt, up a slight 15, or 0.06%. Bulls and bears were temporarily in equilibrium, and upward momentum slowed somewhat. Trading volume was 2,841, down 1,156 MoM. After a volume-driven rally, the market consolidated on shrinking volume, indicating waning bullish aggression. Open interest was 19,791, up 104, a slight increase. Capital remained engaged in the tug-of-war, with no large-scale exit.
Basis daily: According to SMM data, on Sep 18, SMM ADC12 spot price carried a theoretical premium of 810 yuan/mt over the closing price of the most-traded cast aluminum alloy contract (AD2611) at 10:15.
Warrant daily: SHFE data showed that on Sep 18, total registered cast aluminum alloy warrants stood at 22,336 mt, down 419 mt from the previous trading day. By region, Shanghai registered 1,477 mt, unchanged from the previous trading day; Guangdong registered 837 mt, down 89 mt; Jiangsu registered 8,389 mt, down 151 mt; Zhejiang registered 9,380 mt, down 118 mt; Chongqing registered 2,104 mt, down 61 mt; Sichuan registered 149 mt, unchanged from the previous trading day.
Aluminum scrap: Last Friday, SMM A00 aluminum price closed at 24,380 yuan/mt, up 200 yuan/mt from the previous trading day. Scrap market prices followed with gains of 100-150 yuan/mt. On the price spread front, on Sep 18, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was about 2,557 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap was about 1,336 yuan/mt. The aluminum scrap market is expected to continue consolidating on a strong note. Supply side, the impact of tax audits continues to spread. If scrap yards slow shipments, circulating supply will tighten again, providing strong support for aluminum scrap prices. Going forward, close attention will remain on the knock-on effects of tax audits across the aluminum scrap industry chain and changes in orders at scrap utilization enterprises.
Silicon metal: Last week, oxygen-blown #553 silicon in east China was at 9,300-9,400 yuan/mt, and #441 silicon was at 9,400-9,600 yuan/mt. In mid-month, affected by expectations of weakening Q4 polysilicon demand, market sentiment toward far-month contracts was soft. At the current stage, silicon metal fundamentals in September still show supply declining MoM, demand growing, and inventory destocking. As the most-traded silicon metal contract fell to around 8,400-8,500 yuan/mt, cost support and buying interest below futures prices strengthened, and prices shifted to consolidation.
Markets outside China: On the import side, import ADC12 offers remained at $3,100-3,200/mt. Today, the yuan central parity rate rose to 6.7521, and the onshore spot rate broke through the 6.70 level intraday. A stronger exchange rate, combined with higher domestic prices, lowered the converted import cost, and immediate profit/loss has been compressed to near the break-even line. Attention will be on whether import supply can provide effective replenishment.
Summary: Last Friday, overall ADC12 market quotes were raised. SMM ADC12 price rose 150 yuan/mt from the previous trading day to 24,500 yuan/mt. Cost side, recent stricter enforcement of tax invoice policies has increased enterprises' reliance on purchasing raw materials with invoices. However, invoiced supply is limited and priced at a premium, so raw material procurement and invoice cost pressures are rising simultaneously. In addition, recent strength in futures has also lent some support to spot market quotes. Overall, the current rise in ADC12 market prices is driven more by cost-side and supply constraints. Although marginal improvement on the demand side still provides some support, the core contradiction behind the current price increase remains concentrated in raw materials and tax invoices. Short-term spot prices are expected to hold up well.
[Data source statement: Except for public 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.]
![Destocking continues as the holiday approaches, aluminum prices continue to consolidate at highs [SMM Aluminum Morning Meeting Summary]](https://imgqn.smm.cn/usercenter/GEsWk20251217171650.jpg)
