Overnight cast aluminum futures recover; tug-of-war between sellers and buyers keeps spot moving sideways [SMM cast aluminum alloy morning comment]

10.22 SMM cast aluminum alloy morning comment

Futures: Overnight, the most-traded AD2612 contract opened at 22,750 yuan/mt, drifted higher after the open, dipped to a low of 22,690 yuan/mt during the session, shot up to 23,025 yuan/mt, and closed at 22,965 yuan/mt, up 200 yuan/mt or 0.88%, with a trading range of 22,690-23,025 yuan/mt. Trading volume reached 5,643 lots, and open interest decreased by 260 lots. The daily candlestick closed bullish. The B line of the DKX indicator remained below the D line, while the K line of the KD indicator crossed above the D line, showing signs of turning and repairing. After a short-term oversold drop, prices rebounded, but resistance remained overhead. The intraday pattern showed a bottoming-out and rebound, with prices holding at highs after a rapid morning rally.

Basis daily: According to SMM data, on October 21, the theoretical basis of SMM ADC12 spot price against the closing price of the most-traded cast aluminum alloy contract (AD2612) at 10:15 was 1,775 yuan/mt.

Warrant daily: SHFE data showed that on October 21, total registered warrants for cast aluminum alloy stood at 12,763 mt, down 1,478 mt from the previous trading day.

Industry news: According to data from the China Chamber of Commerce for Motorcycles, motorcycle production and sales in September reached 2.1171 million and 2.1855 million units respectively. Production fell 1% MoM, while sales rose 3.88% MoM, up 5.43% and 9.05% YoY respectively. From January to September, cumulative production and sales reached 18.6106 million and 18.5792 million units, up 12.71% and 12.73% YoY respectively. In September, China's motorcycle industry achieved both MoM and YoY growth in production and sales. Foreign trade exports continued to expand, while the domestic sales market gradually stabilized. For the January-September cumulative period, exports maintained high prosperity and provided a strong boost. Large-displacement motorcycles grew faster than the industry average, and the domestic market gradually stabilized and improved.

Aluminum scrap: On Wednesday, SMM A00 aluminum price closed at 23,610 yuan/mt, rebounding 80 yuan/mt from the previous trading day. Aluminum scrap prices generally followed with a 50 yuan/mt increase, while some regions held prices unchanged and stayed on the sidelines. Price spreads: On October 21, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was about 2,107 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap was about 553 yuan/mt. Supply side, tax inspections in central China continued to deepen, making compliant invoiced aluminum scrap increasingly scarce. Enterprises holding invoices showed strong willingness to hold prices firm. Competition among enterprises was intense, with some only able to issue 20% of their quota, keeping effective supply persistently tight.

Silicon metal: On October 21, SMM non-oxygen blown #553 price in east China held steady at 9,400 yuan/mt; oxygen-blown #553 price held steady at 9,450 yuan/mt; #521 price fell 50 yuan/mt; #441 price fell 50 yuan/mt; #421 price fell 50 yuan/mt; #421 for silicone held steady; #3303 price held steady.

Markets outside China: ADC12 quotes outside China pulled back slightly to $3,040–3,120/mt. Driven by stronger domestic ADC12 prices and RMB appreciation, import break-even improved and rebounded above the break-even line, with the theoretical import window now open. Attention should be paid to how changes in overseas quotes and exchange rates affect import inflows.

Summary: On Wednesday, the ADC12 market was mainly stable and wait-and-see. The SMM ADC12 market quote held steady at 24,500 yuan/mt from the previous day. The aluminum price rebound was limited, bullish sentiment had not clearly recovered, and enterprises lacked sufficient momentum to increase quotes. Meanwhile, with prices broadly stable yesterday, further downward pressure had not clearly emerged, and enterprises' willingness to cut prices also weakened. On the demand side, downstream purchases remained mostly need-based, market transactions were ordinary, and demand support was not enough to push prices further upward. Overall, ADC12 prices are expected to continue moving sideways in the short term. Focus should remain on aluminum price fluctuations, raw material cost changes, and actual improvement in downstream purchasing demand.

[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.]