9.8 SMM cast aluminium alloy morning comment
Futures: The most-traded cast aluminium alloy AD2511 contract opened at RMB 20,315 per tonne on Friday night, hitting a high of RMB 20,375 per tonne and a low of RMB 20,255 per tonne, before closing at RMB 20,265 per tonne, down RMB 15 per tonne (0.07 per cent) from the previous close. Trading volume stood at 555 lots, while open interest reached 7,731 lots, with bulls dominating the position reduction.
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Basis report: According to SMM data, the theoretical spot premium of SMM ADC12 over the most-traded cast aluminium alloy contract (AD2511) was RMB 520 per tonne based on the 10:15 AM closing price on September 5.
Aluminium scrap: Spot primary aluminium prices edged up w-o-w on Friday, with SMM A00 closing at RMB 20,610 per tonne, while aluminium scrap prices showed divergent adjustments. As the traditional peak season begins, orders at some scrap utilisation enterprises recovered, but tight supply remained the dominant theme, keeping procurement costs elevated. Prices for baled UBC, shredded aluminium tensile scrap (priced based on aluminium content), scrap wheel hub, and mechanical casting aluminium scrap held steady m-o-m. Regionally, Shanghai, Jiangsu, Shandong, and Henan closely followed aluminium price movements with adjustments of RMB 50-100 per tonne, while Jiangxi, Hubei, Foshan, and Anhui lagged behind, maintaining stable prices w-o-w. Recent significant price adjustments in some regions stemmed from unconfirmed policy implementation, exacerbating supply shortages and forcing some scrap processors to raise raw material recovery prices to sustain production. Aluminium scrap prices are expected to hover at highs this week amid an intensified supply-demand tug-of-war.
Silicon metal: Spot silicon metal prices remained range-bound last week with modest downstream order volumes. SMM oxygen-blown #553 silicon traded at RMB 9,000-9,200 per tonne in east China, while #441 silicon traded at RMB 9,300-9,500 per tonne. Friday's futures rally, driven by polysilicon market dynamics, prompted some silicon enterprises to adopt a wait-and-see approach this week.
Overseas markets: Current overseas ADC12 offers stood at USD 2,500-2,520 per tonne, with import parity maintained around RMB 300 per tonne; Thailand's domestic ADC12 ex-VAT quotes temporarily held at 83-84 baht per kg.
Inventory: SMM data showed Foshan, Ningbo, and Wuxi's daily social inventory of secondary aluminium alloy ingots totalled 34,807 tonnes on September 8, up 413 tonnes m-o-m and 1,092 tonnes w-o-w from September 1.
Summary: Aluminium prices rebounded slightly on Friday, while secondary aluminium producers held quotes firm, with SMM ADC12 stabilising at RMB 20,750 per tonne. Tight scrap availability and rising procurement costs continue to support firm ADC12 offers. Downstream consumption showed narrow recovery, with limited order growth, suggesting peak season effects need more time to materialise. ADC12 prices are expected to remain supported by costs and hover at highs in the short term, but limited demand recovery, coupled with social inventory accumulation, restricts upside room for prices. Future trends require close monitoring of raw material supply, the pace of demand recovery, and policy developments.
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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