The most-traded AD2604 aluminium alloy contract opened higher and retreated after a rapid rise, touching a high of RMB 23,305 per tonne before fluctuating downward, reaching a low of RMB 22,940 per tonne, and rebounding slightly at the close. It finally closed at RMB 230,450 per tonne, down RMB 135 per tonne from the previous close, a decline of 0.58 per cent. The futures showed a pattern of moving downwards after a higher opening, with short-term bullish momentum weakening. Trading volume remained low, and open interest decreased slightly, indicating cautious trading.

Spot-Futures Price Spread Daily Report: According to SMM data, on March 2, the theoretical premium of the SMM ADC12 spot price over the closing price of the most-traded casting aluminium alloy contract (AD2604) at 10:15 was RMB 1,105 per tonne.

Industry News: On March 2, 2025, the State Taxation Administration released six measures for addressing tax issues related to irregular investment attraction and serving the construction of a unified national market. The core is to curb disorderly competition, standardize market order, and facilitate factor mobility by conducting special governance on tax issues related to irregular investment attraction, implementing regulations on tax information reporting for platform enterprises, deepening cross-regional tax services reform, adjusting the tax location for restricted shares, strictly controlling the transfer of tax sources in policy depressions, and unifying the execution standards of tax policies. Follow-up work will continue to better serve the construction of a unified national market.

Warrant Daily Report: SHFE data shows that on March 2, the total registered amount of cast aluminium alloy warrants was 63,103 tonnes, a decrease of 1,351 tonnes from the previous trading day. In Shanghai, the total registered amount was 6,160 tonnes, down 269 tonnes; in Guangdong, it was 21,454 tonnes, down 393 tonnes; in Jiangsu, it was 8,260 tonnes, down 419 tonnes; in Zhejiang, it was 21,402 tonnes, down 180 tonnes; in Chongqing, it was 4,564 tonnes, down 30 tonnes; and in Sichuan, it was 1,293 tonnes, down 60 tonnes.

Aluminium scrap: On Monday, the spot primary aluminium price rose RMB 210 per tonne M-o-M, and the overall aluminium scrap market followed suit, but regional differences remained significant. In terms of the price difference between A00 aluminium and aluminium scrap, on March 2, the price difference in Foshan for mixed aluminium extrusion scrap free of paint was RMB 3,318 per tonne, and in Jiangsu, the price difference for bare bright aluminium wire was RMB 1,211.3 per tonne. Regions such as Shandong, Jiangxi, and Hunan saw larger increases, while other regions were more cautious. This week, the aluminium scrap market is expected to hover at highs, with shredded aluminium scrap (priced based on aluminium content) mainly operating within the range of RMB 19,000-19,600 per tonne (excluding tax).

Supply side, cargo yards are gradually resuming full operations, and the release of supplies will increase, but recycling policies still constrain liquidity. Demand side, the pace of resumption of production at downstream enterprises is accelerating, and restocking demand is expected to be slowly released. The tug-of-war between sellers and buyers continues, and market trading sentiment will gradually recover but remain sluggish. It is necessary to closely monitor the progress of downstream resumptions, primary aluminium price trends, and changes in recycling policies, and be vigilant about the risk of price fluctuations.

Silicon metal: On March 2, SMM east China non-oxygen blown #553 was at RMB 9100-9200 per tonne; oxygen-blown #553 was at RMB 9000-9300 per tonne; 521 was at RMB 9300-9400 per tonne; #441 was at RMB 9200-9500 per tonne; #421 was at RMB 9500-9700 per tonne; #421 for silicone use was at RMB 9700-10000 per tonne; #3303 was at RMB 10200-10400 per tonne. In Kunming and Xinjiang regions, some silicon prices were still slightly lowered. Silicon prices in Huangpu Port, Tianjin, Northwest, Sichuan, and Shanghai remained stable.

Overseas market: Overseas ADC12 quotes rose to the USD 2950-3000 per tonne range, while domestic prices did not increase as much, narrowing the import profit and loss to a balanced level.

Summary: On Monday, the overall quotations in the secondary aluminium alloy market were raised. Before noon, manufacturers generally increased prices by RMB 100 per tonne, and some companies, supported by expectations of rising prices and low finished product inventories, raised prices by up to RMB 200 per tonne. In the afternoon, futures surged, further strengthening market sentiment, and some manufacturers followed suit with another price hike, with the cumulative daily increase ranging from RMB 100 to 400 per tonne.

As enterprises gradually resume production, market supply is gradually recovering, and the willingness to sell has increased; however, the post-holiday resumption of downstream operations is relatively mild, and order releases are still cautious, with purchases mainly driven by rigid demand, resulting in average overall transaction performance. Price increases are more reflective of sentiment and cost-driven factors. Overall, in the short term, ADC12 prices are expected to hold up well.

Before the full realisation of the resumption of production, the release of supply is relatively slow, coupled with cost support, limiting the downside room. Subsequently, as enterprises fully resume production, the market's focus will gradually shift from the supply side to the fulfilment of end-use consumption. If terminal orders see a phased increase and primary aluminium maintains a strong upward trend, there is still room for the ADC12 price centre to move higher; if demand recovery falls short of expectations, prices may continue to fluctuate and consolidate.

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.