May auto market: domestic demand under pressure, exports impressive; price difference between A00 aluminium and aluminium scrap narrows, raw materials in tight supply

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Futures: Overnight, the aluminium alloy 2608 contract opened higher, then retreated after rapid rise, reaching a high of RMB 23,465 per tonne and a low of RMB 23,005 per tonne, closing at the settlement price of RMB 23,251 per tonne. The minutely chart showed that after the night session opened, prices quickly surged to around 23,465, then fluctuated downward, with a slight rebound near the close. The RSI indicator was already in overbought territory.

Trading volume declined from the previous period, while open interest edged up by 121 lots. Overall, after the rapid rise met resistance and pulled back, stabilising near the close, the contract fluctuated upward. In the near term, attention should be paid to the effectiveness of support at RMB 23,200 per tonne.

Spot-Futures Price Spread Daily: According to SMM data, on June 10, the SMM ADC12 spot price had a theoretical premium of 880 over the closing price at 10:15 of the most-traded cast aluminium alloy contract (AD2607).

Warrant Daily: SHFE data showed that on June 10, total registered warrants for cast aluminium alloy stood at 39,224 tonnes, up 358 tonnes from the previous trading day. Among them, Shanghai registered 2,897 tonnes, up 0 tonnes; Guangdong registered 8,648 tonnes, down 153 tonnes; Jiangsu registered 8,041 tonnes, up 481 tonnes; Zhejiang registered 12,754 tonnes, up 88 tonnes; Chongqing registered 5,889 tonnes, down 58 tonnes; Sichuan registered 995 tonnes, up 0 tonnes.

Industry Dynamics: According to CAAM data, in May, automobile production and sales reached 2.616 million units and 2.629 million units, up 1.6 per cent and 4.1 per cent M-o-M respectively, but down 1.2 per cent and 2.1 per cent Y-o-Y respectively.

From January to May, automobile production and sales reached 12.235 million and 12.207 million units, down 4.6 per cent and 4.2 per cent Y-o-Y respectively. According to CAAM analysis, in May, automobile production and sales increased M-o-M but edged down slightly Y-o-Y. Affected by multiple factors such as policy adjustments, changes in market structure, and the macro environment under pressure, the domestic market continued to post a double-digit decline Y-o-Y; exports remained robust, maintaining rapid growth.

Aluminium Scrap: Yesterday, SMM A00 price continued to fall RMB 120 per tonne from the previous trading day to RMB 23,900 per tonne, and the aluminium scrap market edged down slightly in tandem. On the price spread front, on June 10, the price difference between A00 aluminium and mixed aluminium extrusion scrap free of paint in Foshan was RMB 2,458 per tonne, and the price difference between A00 aluminium and shredded aluminium tense scrap had fallen below RMB 2,000 per tonne to RMB 1,920 per tonne.

Aluminium scrap market prices are expected to continue to hold up well at high levels amid fluctuations. As the off-season deepens, the sustainability of orders for downstream scrap utilisation enterprises is a concern. These enterprises are maintaining a strategy of purchasing as needed and low inventory. Procurement sentiment is unlikely to improve significantly, and billing risks in the industry remain high. Meanwhile, expectations of supply-side contraction are strengthening. Overall, the market is characterised by weakness on both supply and demand sides.

Silicon Metal: On June 10, SMM east China non-oxygen blown #553 remained flat from the previous day at RMB 9,150 per tonne; oxygen-blown #553 also held steady from the previous day at 9,150; 521# was flat from the previous day; 441# was flat from the previous day; 421# was flat from the previous day; 421# for silicone was flat from the previous day; 3303# was flat from the previous day. In Tianjin, some silicon prices edged up slightly. Silicon prices in Huangpu Port, Kunming, northwest China, Sichuan, Shanghai, and Xinjiang remained stable.

Markets Outside China: Currently, quotes for imported ADC12 have pulled back slightly to USD 3,350–USD 3,430 per tonne, and immediate import losses per ton have narrowed to within RMB 3,000, but the theoretical import window remained closed.

Summary: On Wednesday, the ADC12 market traded steadily. SMM ADC12 price remained unchanged at RMB 23,900 per tonne. This week, cast aluminium alloy futures diverged from SHFE aluminium, with cast aluminium futures holding steady and strengthening, while SHFE aluminium fell below the RMB 24,000 per tonne level.

In the spot market, A00 aluminium prices declined for several days, while ADC12 prices remained firm. The price spread between the two has returned to positive territory, ending the inversion since April and highlighting the resilience of alloy prices. Cost support remained strong: aluminium scrap prices only dropped modestly in line with A00, and tight supply of compliant raw materials further solidified the price floor.

On the demand side, weakness persisted, with the off-season deepening and output cuts at end-users like OEMs leading to a pullback in orders. Overall, under the combined effect of cost support and demand constraints, significant upward momentum was lacking, but downside room was also limited. As the ADC12-A00 price spread further recovered, there is a possibility of a slight upward probe in prices. It is recommended to continue monitoring aluminium scrap market dynamics and the pace of recovery in automotive end-use demand.

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.