Futures: On Friday night, the most-traded cast aluminium alloy 2602 contract opened at RMB 21,080 per tonne, surged to a high of RMB 21,170 per tonne, then quickly fell to a low of 20,630 per tonne, and finally closed at RMB 20,875 per tonne, down RMB 240 per tonne or 1.14 per cent W-o-W. Bears dominated the increase in positions.
Image for reference only (Source: Alba)
Spot-futures price spread report: According to SMM data, on December 12, the spot price of SMM ADC12 was at a theoretical premium of RMB 575 per tonne to the closing price of the most-traded cast aluminium alloy contract (AD2602) at 10:15.
Warrant report: SHFE data showed that on December 12, the total registered warrants for cast aluminium alloy were 69,147 tonnes, up 152 tonnes W-o-W. The breakdown was as follows: Shanghai (4,757tonnes, up 0tonnes W-o-W), Guangdong (21,652 tonnes, up 152tonnes W-o-W), Jiangsu (11,988tonnes, up 0tonnes W-o-W), Zhejiang (24,022tonnes, up 0tonnes W-o-W), Chongqing (6,308tonnes, up 0tonnes W-o-W), and Sichuan (420tonnes, up 0tonnes W-o-W).
Aluminium scrap: On Friday, the spot price of primary aluminium rose W-o-W, with SMM A00 spot aluminium closing at RMB 22,050 per tonne, and the aluminium scrap market followed the increase. Baled UBC was quoted at RMB 16,450-16,950 per tonne (ex-tax), while shredded aluminium tense scrap (priced based on aluminium content) was quoted at RMB 18,300-18,850 per tonne (ex-tax).
The price difference between A00 aluminium and shredded aluminium tense scrap closed at RMB 1,999 per tonne, and that for Jiangsu bare bright aluminium wire was RMB 899.4 per tonne. The aluminium scrap market is expected to hover at highs this week, with shredded aluminium tense scrap (priced based on aluminium content) mainly in the range of RMB 18,500-19,200 per tonne (ex-tax).
The tug-of-war between sellers and buyers continues, and close attention should be paid to fluctuations in primary aluminium, environmental protection policies, and downstream procurement pace, while being alert to the risk of a high-level correction.
Silicon metal: On Friday, oxygen-blown #553 silicon in east China was at RMB 9,100-9,300 per tonne, and #421 silicon was at RMB 9,500-9,800 per tonne. The most-traded SI contract closed at RMB 8,435 per tonne. On Friday, futures prices saw a slight upward correction but remained at relatively low levels, and silicon enterprises were not active in selling or offering.
Overseas market: Currently, overseas ADC12 quotes are steady at USD 2,620-2,640 per tonne. Due to the rapid rebound in domestic prices, the immediate import loss has narrowed to around RMB 200 per tonne.
Inventory: According to SMM statistics, on December 15, the daily social inventory of secondary aluminium alloy ingots in Foshan, Ningbo, and Wuxi totalled 48,862 tonnes, down 6 tonnes W-o-W and down 356 tonnes compared to Monday (December 8).
Summary: Last Friday, the SMM A00 aluminium spot price rose by RMB 160 per tonne to RMB 22,020 per tonne, while the ADC12 price was raised by another RMB 150 per tonne to RMB 21,750 per tonne.
Aluminium prices have once again broken above the RMB 22,000 per tonne threshold, and raw material quotations have climbed rapidly, prompting secondary aluminium plants to continue adjusting prices, with market offers generally rising by RMB 100-200 per tonne compared to the previous day. Recent sharp fluctuations in aluminium prices have intensified downstream wait-and-see sentiment, leading to cautious procurement by die-casting enterprises and generally moderate market activity.
Although the year-end terminal volume push has provided some demand support, demand is already showing signs of marginal weakening. Supply side, constrained by both environmental protection policy controls and cost pressures, the operating rate in the secondary aluminium industry has experienced a phased decline.
Overall, the current secondary aluminium alloy market is characterized by a tug-of-war between bullish and bearish factors: on one hand, the tight supply-demand balance for aluminium scrap persists, and although cost support has weakened somewhat, it still provides a fundamental floor for the market; on the other hand, marginal weakening in demand combined with aluminium prices fluctuating at highs jointly suppresses downstream procurement enthusiasm, while the decline in industry operating rates results in an overall tight supply-demand balance in the market.
ADC12 prices are expected to continue moving sideways at high levels in the short term, with close attention needed on aluminium price trends, aluminium scrap supply conditions, and actual changes in downstream orders.
Note: This article has been issued by SMM and has been published by AL Circle with its original information without any modifications or edits to the core subject/data.
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