Aluminium alloy futures fluctuate at highs, and short-term macro tailwinds boost the market

Futures: The aluminium alloy 2603 contract opened at RMB 22,985 per tonne on Friday night, retreated after rapid rise, rose to a high of RMB 23,300 per tonne after opening, then pulled back to a low of RMB 22,945 per tonne and fluctuated rangebound, finally closed at RMB 23,035 per tonne, up 0.22 per cent from the previous close; the daily chart showed a medium-term rise, stabilizing above the moving average.

Spot-Futures price spread report: According to SMM data, on January 9, the SMM ADC12 spot price theoretically stood at a premium of RMB 740 per tonne to the closing price of the most-traded cast aluminium alloy contract (AD2603) at 10:15.

Warrant report: SHFE data showed that on January 9, the total registered volume of cast aluminium alloy warrants was 69,922 tonnes, an increase of 185 tonnes from the previous trading day. By region, the total registered volume in Shanghai was 4,757 tonne, unchanged from the previous trading day; Guangdong's total registered volume was 22,207 tonne, unchanged; Jiangsu's total registered volume was 12,741 tonne, an increase of 150 tonne; Zhejiang's total registered volume was 23,577 tonne, an increase of 35 tonne; Chongqing's total registered volume was 5,919 tonne, unchanged; Sichuan's total registered volume was 721 tonne, unchanged.

Aluminium scrap side: Spot primary aluminium prices fluctuated rangebound on Friday compared to the previous trading day, with SMM A00 spot closing at RMB 24,030 per tonne, while aluminium scrap market prices were generally flat. Baled UBC was quoted in the range of RMB 17,750-18,150 per tonne (ex-tax), and shredded aluminium tensile scrap (priced based on aluminium content) was quoted in the range of RMB 19,300-19,800 per tonne (ex-tax).

On the price difference side, on January 9, the price difference between A00 aluminium and mixed aluminium extrusion scrap free of paint in Foshan was RMB 3,836 per tonne, and the price difference between A00 aluminium and shredded aluminium tensile scrap was RMB 2,761 per tonne. With aluminium prices hovering at highs, aluminium scrap was forced to follow the rise, resulting in a "nominal price without actual market" scenario. Scrap yards purchased cautiously to ensure capital chain safety; downstream buying sentiment was dampened, purchasing as needed.

The aluminium scrap market is expected to hover at highs this week, with shredded aluminium tensile scrap (priced based on aluminium content) mainstream range at RMB 18,800-19,200 per tonne (ex-tax). High primary aluminium prices will provide bottom support for aluminium scrap, but poor cost transmission along the industry chain will limit upside room, while inventory pressure on the supply side and the fragmented scrap source structure are difficult to change in the short term.

Silicon metal side: Last week, SMM oxygen-blown #553 silicon in east China was at RMB 9,200-9,300 per tonne, #421 silicon was at RMB 9,500-9,800 per tonne, and spot prices remained basically stable. The most-traded silicon contract fluctuated widely around RMB 8,500-9,000 per tonne, influenced by macro and polysilicon news. Market sentiment towards the outlook was not positive; downstream users and traders mainly purchased low-priced materials in the market.

Overseas market: Current overseas ADC12 quotes temporarily stabilised in the range of  USD2,820-2,850per tonne, and import real-time profit remained around RMB 500 per tonne.

Summary: aluminium prices resumed their upward trend last Friday, with A00 aluminium rising by RMB 30 per tonne to RMB 24,030 per tonne, while SMM ADC12 prices held steady at RMB 23,700 per tonne. Secondary aluminium producers generally kept their offers stable, though some raised quotes by RMB 100–200 per tonne to recover from the previous afternoon's decline. Market transactions remained largely driven by rigid demand, with downstream buyers showing limited acceptance of high prices and a strong wait-and-see sentiment. The secondary aluminium market is currently influenced by a mix of bullish and bearish factors: cost support and tight supply provide a floor for prices, while weakening demand exerts downward pressure. Overall, the release of macro tailwinds is expected to provide a short-term boost to the market, and ADC12 prices are likely to continue fluctuating at high levels.

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.