[SMM Cast Aluminium Alloy Morning Comment: Bears Reduced Positions Overnight in Most-Traded Contract, High Reached 20,435 RMB per metric tonne] On Tuesday, SMM ADC12 prices held steady at 20,750 RMB per metric tonne. Post-September regional tax rebate policies remain unclear, with thick wait-and-see sentiment prevailing in the secondary aluminium market. Tight raw material supply further bolstered firm producer offers on cost support. Demand side, approaching traditional peak season drove a slight recovery in downstream procurement, but high prices capped transaction volumes, leaving actual demand mediocre.
9.3 SMM Morning Comment on Cast Aluminium Alloy
Futures: The most-traded cast aluminium alloy AD2511 futures contract opened at 20,280 RMB per metric tonne overnight, hitting a high of 20,435 RMB per metric tonne and a low of 20,230 RMB per metric tonne, before closing at 20,405 RMB per metric tonne, up 105 RMB per metric tonne (0.52 per cent) from the previous close. Trading volume stood at 1,210 lots with open interest at 8,051 lots, dominated by short position reductions.
Basis Report: According to SMM data, the theoretical premium of SMM ADC12 spot price over the closing price of the most-traded cast aluminium alloy AD2511 futures contract at 10:15 on September 2 was 410 RMB per metric tonne.
Aluminium scrap: Spot primary aluminium prices rebounded WoW on Tuesday, with SMM A00 aluminium closing at 20,710 RMB per metric tonne, while aluminium scrap market prices followed the uptrend. As the traditional peak season begins, orders at some downstream scrap utilisation enterprises recovered. However, tight supply remained the dominant theme in the scrap market, keeping procurement prices elevated and generally tracking aluminium price movements. Yesterday, baled UBC was mainly quoted at 15,500-16,000 RMB per metric tonne (ex-tax), while shredded aluminium tensile scrap (priced based on aluminium content) was mainly quoted at 17,000-17,500 RMB per metric tonne (ex-tax). Baled UBC rose 50 RMB per metric tonne DoD, while shredded aluminium tensile scrap held flat DoD. In Jiangxi, scrap aluminium quotations continued to adjust today with notable divergences—wheel hub prices fell 200 RMB per metric tonne while wrought aluminium alloy scrap prices rose 100 RMB per metric tonne, showing initial signs of policy impacts. Price spreads: The Foshan price difference between A00 aluminium and mixed aluminium extrusion scrap free of paint widened 80 RMB per metric tonne DoD to 2,020 RMB per metric tonne, while the Shanghai price difference between A00 aluminium and mechanical casting aluminium scrap expanded 90 RMB per metric tonne DoD to 1,972 RMB per metric tonne.
Silicon metal: Yesterday, SMM oxygen-blown #553 silicon in east China traded at 9,000-9,200 RMB per metric tonne, up 50 RMB per metric tonne DoD. In futures, the most-traded SI2511 contract opened at 8,480 RMB per metric tonne, peaked at 8,590 RMB per metric tonne, bottomed at 8,440 RMB per metric tonne, and settled at 8,470 RMB per metric tonne, up 95 RMB per metric tonne from the previous session. Industrial silicon futures overall showed stronger performance than on Monday, with some traders raising offers slightly. However, downstream buyers procured at earlier low prices and showed limited interest in higher-priced material, resulting in heavy price-bargaining sentiment and thin trading volume.
Overseas markets: Current overseas ADC12 offers stood at $2,490-2,520per per metric tonne, with import parity maintained around 300 RMB per metric tonne. Thailand’s local ex-tax ADC12 quotes temporarily held at 83-84 baht per kg.
Inventory: According to SMM statistics, the daily social inventory of secondary aluminium alloy ingots in Foshan, Ningbo, and Wuxi totalled 33,928 metric tonnes on September 3, up 148 metric tonnes DoD and 1,314 metric tonnes WoW from August 26.
Summary: On Tuesday, the SMM ADC12 price held steady at 20,750 RMB per metric tonne. After September, the regional tax rebate policy remains unclear, and the secondary aluminium market is dominated by a wait-and-see sentiment. Coupled with tight raw material supply, cost support has kept manufacturers' offers firm. On the demand side, the approaching traditional peak season has driven a slight recovery in downstream procurement, but high prices have restrained transaction volumes, and actual demand remains mediocre. In the short term, the ADC12 price is expected to continue fluctuating upward, supported by cost pressures, low inventory, and policy factors. However, slow demand recovery may limit upside room. Going forward, close attention should be paid to the progress of policy implementation, the recovery of aluminium scrap supply, and marginal changes in end-use demand.
[Data source statement: Except for publicly available information, other data are processed by SMM based on public information, market exchanges, and SMM's internal database model, for reference only and not as a decision-making suggestion.]
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.
Responses
