The most-traded AD2511 contract for cast aluminium alloy opened at RMB 20,050 per tonne, hit a low of RMB 20,025 per tonne, and reached a high of RMB 20,090 per tonne overnight. It finally closed at RMB 20,055 per tonne, down RMB 40 per tonne or 0.20 per cent from the previous close. Trading volume was 549 lots, with open interest at 7,897 lots, mainly due to longs reducing their positions.
Spot-Futures Price Spread Daily Report: According to SMM data, on August 19, the theoretical premium of SMM ADC12 spot price over the closing price of the most-traded casting aluminium alloy contract (AD2511) at 10:15 am was RMB 255 per tonne.
Industry Updates: (1) According to CAAM data, in July, auto production and sales were 2.591 million and 2.593 million units, up 13.3 per cent and 14.7 per cent YoY respectively. From January to July, auto production and sales were 18.235 million and 18.269 million units, up 12.7 per cent and 12 per cent YoY respectively. In July, NEV production and sales were 1.243 million and 1.262 million units, up 26.3 per cent and 27.4 per cent YoY respectively; NEVs accounted for 48.7 per cent of total new car sales. From January to July, NEV production and sales were 8.232 million and 8.22 million units, up 39.2 per cent and 38.5 per cent YoY respectively; NEVs accounted for 45 per cent of total new car sales. (2) According to the China Motorcycle Chamber of Commerce, in July, motorcycle production and sales were 1.871 million and 1.8779 million units, down 0.01 per cent MoM and up 2.25 per cent and 2.51 per cent YoY respectively. From January to July, motorcycle production and sales were 12.4932 million and 12.4993 million units, up 10.35 per cent and 10.14 per cent YoY respectively.
Aluminum Scrap: On Tuesday, the spot price of primary aluminium increased by RMB 40 per tonne compared to the previous trading day, with SMM A00 spot closing at RMB 20,590 per tonne. The overall aluminium scrap market prices remained stable. Baled UBC scrap aluminium prices ranged from RMB 15,400 to 15,900 per tonne (excluding tax), while shredded aluminium tense scrap (priced based on aluminium content) prices ranged from RMB 17,100 to 17,600 per tonne (excluding tax). It is expected that the aluminium scrap market will fluctuate at highs this week. Affected by the policy transition period for secondary aluminium, raw material purchase prices are likely to rise, and the supply of shredded aluminium tense scrap (priced based on aluminium content) is expected to tighten, with prices fluctuating between RMB 17,100 and 17,600 per tonne (excluding tax). Baled UBC, supported by consumption from downstream can stock enterprises, is expected to range from RMB 15,500 to 16,000 per tonne (excluding tax).
Silicon Metal: (1) Prices: Yesterday, SMM oxygen-blown #553 silicon in east China was priced at RMB 9,300-9,500 per tonne, and #441 silicon at RMB 9,600-9,800 per tonne, unchanged from the previous day. The futures market continued to fluctuate considerably, with the main contract 2511 opening at RMB 8,615 per tonne, reaching a high of RMB 8,730 per tonne, and a low of RMB 8,525 per tonne, closing at RMB 8,625 per tonne, up RMB 20 per tonne from the previous day. Recently, spot prices have been range-bound and stagnant, with market transactions remaining need-based, putting pressure on prices. (2) Production: A small amount of additional production capacity resumed operations, leading to production release. Silicon metal weekly production continued to increase MoM, and supply-side production maintained a slight upward trend in August.
Overseas market: Current overseas ADC12 offers have risen to the range of $2,470-2,500 per tonne, while domestic import spot prices held steady around 19,700 yuan/mt, with import losses widening again. Local ADC12 offers in Thailand (excluding tax) are concentrated at 82-84 baht/kg.
Inventory: According to SMM statistics, as of August 20, the daily social inventory of secondary aluminium alloy ingots in Foshan, Ningbo, and Wuxi totalled 31,596 mt, up 164 mt from the previous trading day but down 16 mt WoW from Wednesday, August 13.
Summary: Recent policy adjustments in some regions and tight supply of aluminium scrap have kept raw material costs high, prompting companies to maintain firm offers. SMM ADC12 prices temporarily stabilized at RMB 20,350 per tonne. Demand side, the traditional off-season atmosphere persists, with actual consumption showing weak improvement and mediocre transaction performance. In the short term, cost support and policy disruptions may continue to underpin prices, but weak demand coupled with inventory buildup pressure will limit upside room. Going forward, close attention should be paid to the implementation of policies and the recovery pace of demand in the peak season.
[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 constituting decision-making advice.]
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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