Cast Aluminum Alloy Night Session Saw Wild Swings but Closed Higher; ADC12 Moved Sideways in a Narrow Range Driven by Costs [SMM Cast Aluminum Alloy Morning Comment]

4.17 SMM Cast Aluminum Alloy Morning Comment

Futures: The most-traded cast aluminum alloy futures contract retreated after rapidly rising to an intraday high of 24,245 yuan/mt overnight, then dipped to a low of 24,035 yuan/mt, showing a wild swings pattern. Prices gradually stabilized and rebounded in the latter half of the night session, with the center steadily rising amid repeated tug-of-war around the average price line, recovering most intraday losses by the close. It finally settled at 24,155 yuan/mt, up 0.04% from the previous close. On the daily chart, the recent rebound continued, with prices firmly above dual moving average support. The MACD lines diverged upward in sync, sustaining the bullish trend.

Spot-Futures Spread Report: According to SMM data, the theoretical premium of SMM ADC12 spot price over the most-traded cast aluminum alloy futures contract (AD2606) narrowed to 565 yuan/mt at the 10:15 AM closing price on April 16.

Warrant Report: SHFE data showed the total registered warrant volume for cast aluminum alloy stood at 30,283 mt on April 16, down 213 mt from the previous day. By region: Shanghai (1,822 mt, unchanged WoW), Guangdong (11,603 mt, down 183 mt WoW), Jiangsu (3,879 mt, down 30 mt WoW), Zhejiang (8,170 mt, unchanged WoW), Chongqing (3,603 mt, unchanged WoW), Sichuan (1,206 mt, unchanged WoW).

Aluminum scrap: The US-Iran conflict disrupted traffic through the Strait of Hormuz, fueling market sentiment and pushing aluminum prices higher. Spot primary aluminum prices rose again on Thursday MoM, with scrap market prices broadly following suit though caution prevailed. Supply side, tightened regulatory scrutiny on "reverse invoicing" policies kept compliance costs high for scrap recycling, keeping actual tax-compliant available supply tight. Scrap yards held prices firm with strong reluctance to sell, while some regional traders adopted a wait-and-see approach toward high-priced material, resulting in limited actual market circulation. Demand side, the traditional "Golden March, Silver April" peak season remained weak. Downstream aluminum tense scrap processors maintained purchasing-as-needed and low-inventory strategies, showing limited acceptance of high prices with conservative procurement pace. Wrought aluminum alloy scrap enterprises, currently in peak production season, showed relatively higher stockpiling enthusiasm but provided limited price support. Close monitoring is needed on the US-Iran conflict's actual impact on aluminum price fluctuations and end-user order recovery expectations, with caution against potential pullback risks.

Silicon metal: The silicon metal market consolidated at lows this week, with fewer low-priced cargoes as futures strengthened. As of April 16, SMM oxygen-blown #553 silicon in east China traded at 9,000-9,100 yuan/mt, up 50 yuan/mt WoW; #441 at 9,200-9,300 yuan/mt, up 50 yuan/mt WoW; #421 (used in silicone) at 9,300-9,800 yuan/mt, flat WoW; #3303 at 10,100-10,300 yuan/mt, flat WoW. In futures, the most-traded contract showed strength - SI2605 settled at 8,480 yuan/mt on Thursday, up 220 yuan/mt WoW. SI2609 peaked at 8,620 yuan/mt, with the absolute price slightly below most silicon enterprises' shipment expectations after basis adjustment. Downstream users mainly consumed previous low-priced inventories or restocked minimally as needed, with subdued trading activity.

Markets outside China: Current overseas ADC12 offers ranged between $3,320-3,380/mt, with import losses persistently around 2,000 yuan.

Summary: The ADC12 market broadly followed with modest gains on Thursday. Driven by primary aluminum's significant rise, cost support strengthened noticeably, prompting most enterprises to raise prices by about 100 yuan/mt, with some hikes extending to 200 yuan/mt. However, downstream acceptance of high prices remained limited based on demand-side feedback, resulting in mediocre transactions. Some enterprises lacked momentum for further increases and opted to hold prices steady. Overall, the market remains primarily cost-driven, while demand-side constraints cap upside potential. Short-term ADC12 prices may continue moving sideways, though upside room depends on downstream follow-through and transaction improvements.

[Data Source Statement: Data beyond publicly available information is derived from public sources, market communication, and SMM's proprietary database models for reference only, not constituting decision-making advice.]