Aluminum Alloy Night Session Trading Was Relatively Weak; ADC12 Moved Sideways in the Short Term [SMM Cast Aluminum Alloy Morning Comment]

Apr 1 SMM Cast Aluminum Alloy Morning Comment

Futures: The AD2605 cast aluminum alloy contract in the night session opened higher and then fluctuated lower. It opened at 23,985 yuan/mt, hit an intraday high of 23,985 yuan/mt and a low of 23,705 yuan/mt, and finally closed at 23,745 yuan/mt, up 50 yuan/mt, or 0.21%, from the previous trading day. Trading volume was 2,253 lots, down 5,248 lots from the previous trading day, while open interest stood at 6,784 lots, down 174 lots. Both trading volume and open interest pulled back, indicating relatively weak trading sentiment in the night session. Technically, the KDJ indicator weakened intraday, with prices fluctuating near short-term moving averages. Resistance at 24,000 was evident, while support formed around 23,700. In the short term, the contract is expected to maintain a sideways movement pattern.

Spot-futures price spread daily: According to SMM data, as of the 10:15 closing price on March 31, the theoretical spot premium of SMM ADC12 spot cargo over the most-traded cast aluminum alloy contract (AD2605) narrowed slightly to 1,130 yuan/mt.

Warrant daily: SHFE data showed that as of March 31, the total registered volume of cast aluminum alloy warrants was 33,582 mt, down 1,625 mt from the previous trading day. Of this, Shanghai registered 2,003 mt, down 149 mt; Guangdong 14,297 mt, down 664 mt; Jiangsu 2,824 mt, down 122 mt; Zhejiang 9,618 mt, down 659 mt; Chongqing 3,634 mt, unchanged; and Sichuan 1,206 mt, down 31 mt.

Aluminum scrap: The US-Iran war disrupted capital sentiment and aluminum fundamentals, driving spot primary aluminum to extend its gains yesterday from the previous trading day by 80 yuan/mt. The aluminum scrap market was largely stable overall, with some grades catching up with yesterday’s gains. The aluminum scrap market is expected to maintain a high-level consolidation pace this week, with the mainstream range for shredded aluminum tense scrap, priced based on aluminum content, running at 19,800-20,500 yuan/mt (ex-tax). Policy constraints on the supply side are unlikely to ease in the short term. Tight compliant cargoes, coupled with yards that hold back cargoes, will continue to underpin prices. Demand side, the peak-season recovery fell short of expectations, downstream players showed strong wait-and-see sentiment amid high prices, and lacked motivation for large-scale restocking, with just-in-time procurement still dominant. Primary aluminum still faces fluctuations under the influence of geopolitical and macro factors. Overall, the tug-of-war between sellers and buyers will continue, and caution is warranted against the risk of wild swings.

Silicon metal: (1) The silicon market remained in weak stagnant consolidation. Yesterday, SMM east China oxygen-blown #553 silicon was at 9,100-9,200 yuan/mt, down 50 yuan/mt from the previous day. Although raw material costs remained firmly supportive, weaker expectations for production cuts on the supply side weighed on market sentiment. Futures prices were weak at the start of the week, and the center of spot transactions for some cargoes in the market moved lower. (2) Production: SMM data showed that China’s silicon metal production in March 2026 was 329,900 mt, up 19.7% MoM and down 3.6% YoY. March production increased sharply MoM, mainly due to some capacity resuming production in early March and the increase in production days during the month.

Markets outside China: Affected by the attack and damage at EGA’s Al Taweelah smelter in the UAE, expectations for overseas supply tightened again. LME aluminum surged at the open, driving overseas ADC12 quotes quickly up to $3,320-3,400/mt. Immediate import losses widened to above 2,000 yuan/mt, and the theoretical import window remained closed.

Summary: On Tuesday, the ADC12 market mainly held prices steady. After the aluminum price rally slowed, enterprises’ willingness to adjust prices declined markedly, and most chose to stay on the sidelines. In terms of market expectations, some enterprises remained bullish, but against the backdrop of marginal weakening in end-use consumption, tighter downstream procurement, and mediocre transaction performance, overall industry sentiment was cautious, with bearish sentiment gradually building in the short term. ADC12 prices are expected to continue to fluctuate rangebound in the short term. Going forward, close attention should be paid to the impact of developments in the Middle East on aluminum prices and downstream consumption performance.

[Data source disclaimer: Except for public information, all other data is processed and derived by SMM based on public information, market communication, and SMM’s internal database models, and is for reference only and does not constitute decision-making advice.]