Futures: The most-traded cast aluminium alloy ad2512 contract opened at RMB 20,325 per tonne overnight, hit a high of RMB 20,360 per tonne, and finally closed at the lowest of 20,240 per tonne, down RMB 85 per tonne or 0.42 per cent from the previous close. Trading volume was 1,110 lots, open interest was 11,888 lots, with bears increasing positions as the main force.
Image source: https://sgt-scrap.com/
Basis report: According to SMM data, on September 26, the theoretical premium of SMM ADC12 spot price to the most-traded cast aluminium alloy contract (AD2512) closing price at 10:15 was RMB 515 per tonne.
Warrant report: On September 26, the total registered volume of cast aluminium alloy warrants was 22,560 tonnes, an increase of 3,379 tonnes from the previous trading day. By region, the total registered volume in Shanghai was 3,073 tonnes (up 0 tonnes), Guangdong 2,392 tonnes (up 821 tonnes), Jiangsu 7,085 tonnes (up 1,506 tonnes), Zhejiang 6,109 tonnes (up 481 tonnes), Chongqing 3,901 tonnes (up 571 tonnes), and Sichuan 0 tonne (up 0 tonne).
Industry Dynamics: SHFE data showed that on September 26, total aluminium alloy inventory in delivery warehouses was 54,570 tonnes, an increase of 34,204 tonnes from the previous Friday. By region, inventory in Shanghai was 4,528 tonnes, Guangdong 17,173 tonnes, Jiangsu 10,308 tonnes, Zhejiang 16,455 tonnes, Chongqing 6,106 tonnes, and Sichuan 0 mt.
Aluminium scrap side: Spot primary aluminium prices were flat on Friday compared to the previous trading day, with SMM A00 spot aluminium closing at RMB 20,770 per tonne, while aluminium scrap market prices overall held steady. With the National Day holiday approaching, enterprises in parts of Henan, Jiangxi, and Shandong reported having started stockpiling production raw materials in advance for the holiday; amid the aluminium scrap shortage, overall market prices continued to hover at highs.
On Friday, baled UBC was quoted in a concentrated range of RMB 15,550-16,150 per tonne (ex-tax), and shredded aluminium tense scrap (priced based on aluminium content) was quoted in a concentrated range of RMB 17,300-17,800 per tonne (ex-tax).
Baled UBC, shredded aluminium tense scrap (priced based on aluminium content), scrap wheel hub, and mechanical casting aluminium scrap were all flat W-o-W. Aluminium scrap prices are expected to hover at highs next week. On one hand, the tight supply fundamentals of aluminium scrap are difficult to alleviate in the short term, and the supporting effect of downstream pre-holiday stockpiling demand on prices continues to ferment; on the other hand, no further implementation feedback has been received regarding domestic tax cleanup policies, but looking ahead, downstream scrap utilisation enterprises still have intentions to drive down prices.
Overall, the mainstream price range for shredded aluminium tense scrap (priced based on aluminium content) is expected to fluctuate around RMB 17,300-17,800 per tonne, while baled UBC prices are likely to hover near RMB 15,600-16,100 per tonne. Markets need to closely monitor the sustainability of downstream stocking demand ahead of the National Day holiday, the actual implementation pace of tax policies, and further directional cues from primary aluminium prices.
Silicon metal aspect: (1) Price: Last week, pre-holiday procurement by downstream users led to active market transactions and firm spot prices. By last Friday, SMM oxygen-blown #553 silicon in east China was at RMB 9,400-9,600 per tonne, and #441 silicon was at RMB 9,600-9,800 per tonne. As centralised procurement gradually concludes, market activity has weakened; monitor manufacturers' sales sentiment and changes in large enterprises' operating rates.
(2) Production: In September, operating capacity in northern China continued to increase, leading to higher national silicon metal production. Many silicon enterprises in southwestern China plan to reduce or halt production by late October, so the short-term silicon metal supply remains high.
Overseas market: Overseas ADC12 offers were concentrated at USD 2,530-2,560 per tonne, while domestic spot prices were at RMB 20,000-20,300 per tonne, with immediate import losses widening to around RMB 400 per tonne. Local ADC12 ex-tax offers in Thailand remained at THB 81-82 per kg.
Inventory aspect: According to SMM statistics, on September 29, the daily social inventory of secondary aluminium alloy ingots in Foshan, Ningbo, and Wuxi totalled 50,050 tonnes, up 104 tonnes from the previous trading day and up 382 tonnes W-o-W (from Monday, September 22).
Summary: Last Friday, the SMM ADC12 price held steady at RMB 20,900 per tonne. Pre-holiday raw material stocking demand from secondary aluminium plants was constrained by tight aluminium scrap resources, highlighting procurement pressure.
Demand side, as this year's National Day and Mid-Autumn Festival holidays coincide, downstream die-casting enterprises' holiday periods extended by 1-2 days Y-o-Y, with enterprise holidays generally lasting 3-8 days (a few maintained production). Although pre-holiday stocking demand boosted transactions for manufacturers and traders, the overall increase was limited.
Overall, cost support from aluminium scrap and pre-holiday stocking demand provides a floor for ADC12 prices, but extended downstream holidays, limited restocking increments, and continuous inventory buildup constrain upside potential. ADC12 prices are expected to fluctuate range-bound pre-holiday; closely monitor raw material availability, holiday inventory accumulation, and post-holiday demand recovery.
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