Futures: On Friday night, the most-traded cast aluminium alloy contract AD2511 opened at its highest point of RMB 20,250 per tonne, hit a low of RMB 20,060 per tonne, and finally closed at RMB 20,095 per tonne, down RMB 70 per tonne or 0.35 per cent from the previous close. The trading volume was 909 lots, with open interest at 7,942 lots, mainly due to bulls reducing their positions.
Image for representational purposes only
Spot-futures price spread daily report: According to SMM data, on August 15, the theoretical premium of the SMM ADC12 spot price over the closing price of the most-traded cast aluminium alloy contract (AD2511) at 10:15 AM was RMB 205 per tonne.
Aluminium scrap: In the previous trading day, the spot primary aluminium price remained unchanged compared to the previous trading day, with SMM A00 spot closing at RMB 20,710 per tonne. The overall aluminium scrap market prices were stable. During the current off-season, downstream scrap utilisation enterprises showed weak order releases, with purchases mainly driven by rigid demand. The centralised quotes for baled UBC in the previous trading day ranged from RMB 15,500 to 16,000 per tonne (excluding tax), while shredded aluminium tense scrap (priced based on aluminium content) was quoted between RMB 17,100 and RMB 17,600 per tonne (excluding tax).
Baled UBC, shredded aluminium tense scrap (priced based on aluminium content), and wheel hubs (both automotive and motorcycle) remained flat WoW. It is expected that the price centre of the aluminium scrap market will further shift upwards this week. Affected by the transitional period of policies related to secondary aluminium, raw material purchase prices are likely to rise, with the supply of shredded aluminium tense scrap (priced based on aluminium content) becoming tighter, fluctuating within the range of 17,100-17,600 per tonne (excluding tax); supported by consumption from downstream can stock enterprises, baled UBC is expected to operate within the range of 15,500-16,000 per tonne (excluding tax).
Silicon metal: Last week, the spot silicon metal prices fluctuated rangebound, with SMM oxygen-blown #553 silicon in east China ranging from RMB 9,300 to 9,500 per tonne, and #441 silicon from RMB 9,600 to 9,800 per tonne. In the futures market, the most-traded SI2511 contract fluctuated considerably, with the spot-futures price spread remaining largely unchanged. Downstream users showed a strong sentiment to drive down prices when buying the dip.
Overseas market: Currently, overseas ADC12 quotes remain steady in the range of 2,460-2,480 USD per tonne. Domestic import spot prices have risen to around RMB 19,700 per tonne. Coupled with the appreciation of the RMB exchange rate, the immediate loss on imports has narrowed to within RMB 500 per tonne; local Thai ADC12 quotes (excluding tax) are concentrated at 82-84 THB per kg.
Inventory: According to SMM statistics, on August 18, the daily social inventory of secondary aluminium alloy ingots in Foshan, Ningbo, and Wuxi totalled 31,653 tonnes, an increase of 10 tonnes from the previous trading day and an increase of 308 tonnes from the previous Monday (August 11).
Summary: On Friday, aluminium prices stabilised, and there was insufficient sentiment for price adjustments in the secondary aluminium market, keeping prices stable, with SMM ADC12 prices holding steady at RMB 20,350 per tonne. Recently, multiple local governments have been clearing and abolishing non-compliant fiscal return and subsidy policies. Affected by these policy adjustments, some secondary aluminium plants have taken measures to reduce or halt production, waiting to observe the direction of subsequent policy implementation. On the consumption front, the traditional off-season atmosphere persisted, with no significant improvement in actual demand, and overall transactions remained sluggish. In the short term, cost support and policy fluctuations may continue to drive prices to fluctuate upward, but weak demand and inventory buildup pressure will limit the upside room. Close attention should be paid to policy implementation and the pace of demand recovery during the peak season.
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
