4.2 SMM Morning Comment on Cast Aluminum Alloy
Futures: Overnight, the most-traded AD2605 cast aluminum alloy contract opened at 23,680 yuan/mt, then quickly dipped to around 23,623 yuan/mt and touched the night session low of 23,525 yuan/mt before stopping its decline and rebounding. During the session, bulls gradually pushed prices higher, with the price climbing to 23,780 yuan/mt to hit the night session high, before pulling back slightly and fluctuating. It finally closed at 23,730 yuan/mt, up 215 yuan/mt from the previous close, or 0.91%. The KD indicator showed an upward turn from low levels, with bullish momentum somewhat repaired. Overall, the night session showed a pace of bottoming out and holding up well.
Spot-Futures Price Spread Daily: According to SMM data, on April 1, the theoretical spot-futures price spread of SMM ADC12 spot prices against the 10:15 closing price of the most-traded cast aluminum alloy contract (AD2605) narrowed slightly to a premium of 1,040 yuan/mt.
Warrant Daily: SHFE data showed that as of April 1, the total registered volume of cast aluminum alloy warrants was 32,612 mt, down 970 mt from the previous trading day. Among them, the total registered volume in Shanghai was 1,942 mt, down 61 mt from the previous trading day; Guangdong 13,780 mt, down 517 mt; Jiangsu 2,704 mt, down 120 mt; Zhejiang 9,346 mt, down 272 mt; Chongqing 3,634 mt, up 0 mt; and Sichuan 1,206 mt, up 0 mt.
Aluminum scrap: Yesterday, spot primary aluminum dropped slightly by 10 yuan/mt from the previous trading day, while the aluminum scrap market was largely stable overall. The aluminum scrap market is expected to maintain its high-level consolidation pace this week, with the mainstream range for shredded aluminum tense scrap priced based on aluminum content hovering 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 holding back cargoes, will continue to underpin prices. On the demand side, the peak-season recovery fell short of expectations. Downstream players showed strong wait-and-see sentiment amid high prices, lacking momentum for large-scale restocking, while just-in-time procurement remained the mainstream. Primary aluminum was still subject to fluctuations under the influence of geopolitical and macro factors. Overall, the tug-of-war between sellers and buyers continued, and caution is warranted against the risk of wild swings in prices.
Silicon metal: On April 31, SMM east China non-oxygen blown #553 fell 50 yuan/mt MoM from the previous day; oxygen-blown #553 fell 50 yuan/mt MoM; #521 fell 50 yuan/mt MoM; #441 fell 50 yuan/mt MoM; #421 fell 50 yuan/mt MoM; #421 for silicone was largely stable MoM from the previous day; and #3303 was largely stable MoM from the previous day. Some silicon prices in Huangpu Port, Tianjin, and Shanghai still declined. Silicon prices in Sichuan, the northwest, Xinjiang, and Kunming were stable.
Markets outside China: Imported ADC12 quotes remained in the range of $3,320-3,380/mt, while immediate import losses still stood above 2,000 yuan/mt, leaving the theoretical import window closed.
Summary: On Wednesday, ADC12 market prices were mainly stable. Fluctuations in aluminum prices and aluminum scrap prices narrowed, and support from the cost side tended to stabilize, leaving enterprises generally with insufficient motivation to adjust prices. Meanwhile, downstream demand showed no obvious improvement, with procurement still dominated by just-in-time procurement, and market transactions delivered mediocre performance. Against the backdrop of no new macro or fundamental drivers, ADC12 prices are expected to maintain a narrow sideways pattern 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 Statement: 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.]
