April Secondary Aluminum PMI Data Fell Below 50 Mark, Off-Season Pressure in May Expected to Remain Under Pressure [SMM Cast Aluminum Alloy Morning Comment]

4.3 SMM Cast Aluminum Alloy Morning Comment

Futures: The AD2606 contract opened at 23,010 yuan/mt in the night session, reaching a high of 23,120 yuan/mt and a low of 22,880 yuan/mt, closing at 22,940 yuan/mt, down 160 yuan/mt or 0.69% from the previous settlement price. The night session overall moved downwards after a higher opening, with a slight recovery at the end. Trading volume was 3,835 lots, open interest was 8,709 lots, down 859 lots from the previous trading day. The MACD indicator showed red bars, indicating some release of short-term bearish sentiment.

Spot-futures price spread daily report: According to SMM data, on April 29, the SMM ADC12 spot price was at a theoretical premium of 695 yuan/mt to the most-traded cast aluminum alloy contract (AD2606) closing price at 10:15.

Warrant daily report: SHFE data showed that on April 29, total registered warrants for cast aluminum alloy were 32,624 mt, up 421 mt from the previous trading day. Shanghai registered 1,822 mt (unchanged); Guangdong registered 10,878 mt (down 30 mt); Jiangsu registered 4,769 mt (up 392 mt); Zhejiang registered 9,506 mt (up 59 mt); Chongqing registered 4,143 mt (unchanged); Sichuan registered 1,506 mt (unchanged).

Industry dynamics: According to SMM data, the secondary aluminum industry PMI in April was 44.6%, down 24.2 percentage points MoM, falling below the 50 mark again, indicating a notable contraction in industry prosperity. In May, affected by the off-season and the Labour Day holiday, the secondary aluminum industry PMI is expected to be under pressure and remain below the 50 mark.

Aluminum scrap: Yesterday, spot primary aluminum prices fluctuated slightly upward by 10 yuan/mt from the previous trading day, while aluminum scrap prices remained largely stable with minor adjustments in some grades. Overall, supply-side policy constraints are unlikely to ease in the short term, with tight compliant supply and holders holding back from selling providing support, while the increasing probability of declining imports will further tighten supply. Demand side, the divergence between wrought aluminum alloy scrap and aluminum tense scrap downstream remained unchanged, with aluminum price fluctuations and lack of orders still suppressing purchase willingness. In the short term, the uncertain US-Iran conflict outlook, tight compliant supply, and expected decline in aluminum scrap imports are expected to support aluminum scrap prices to hold up well.

Silicon metal: On April 29, SMM east China non-oxygen blown #553 was stable from the previous day; oxygen-blown #553 was stable; #521 was stable; #441 was stable; #421 was stable; #421 for silicone use was stable; #3303 was stable. Silicon prices in Huangpu Port, Tianjin, northwest China, Xinjiang, Sichuan, Kunming, and Shanghai remained stable. Silicon (Si≥97%) prices also remained stable.

Markets outside China: Currently, ex-China ADC12 quotes were at the high end of the $3,320-3,400/mt range, with immediate import losses widening to around 3,000 yuan, and the import window closed.

Summary: On Wednesday, the ADC12 market overall operated steadily, with SMM ADC12 prices unchanged from the previous trading day at 23,900 yuan/mt. Market quotes generally remained stable, with enterprises showing insufficient willingness and motivation to adjust prices. As the Labour Day holiday approached, downstream enterprises gradually entered holiday pace, pre-holiday stockpiling demand was subdued, and with the industry gradually entering the off-season, end-user procurement pace slowed notably, leaving insufficient upward momentum for prices. The market is expected to remain in the doldrums before the holiday.

[Data source disclaimer: Data other than public information is derived from public information, market communication, and SMM's internal database models, processed by SMM for reference only and does not constitute decision-making advice.]