9.9 SMM cast aluminium alloy morning comment
Futures: The most-traded cast aluminium alloy ad2511 contract opened at RMB 20,295 per tonne overnight, hit a high of RMB 20,330 per tonne, and closed at the day's low of RMB 20,200 per tonne, down RMB 95 per tonne (0.47per cent) from the previous close. Trading volume stood at 288 lots, with open interest at 7,769 lots, mainly driven by short position increases.
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Spot-Futures Price Spread Report: According to SMM data, the theoretical premium of the SMM ADC12 spot price over the most-traded cast aluminium alloy contract (AD2511) 10:15 am closing price was RMB 465 per tonne on September 8.
Aluminium scrap: Spot primary aluminium prices edged up m-o-m on Monday, with SMM A00 spot aluminium closing at RMB 20,680 per tonne, while aluminium scrap market prices remained generally stable. Baled UBC rose RMB 100 per tonne w-o-w, while shredded aluminium tensile scrap (priced based on aluminium content), scrap wheel hub, and mechanical casting aluminium scrap held steady from the previous trading day. Recent significant price adjustments in some regions stemmed from unverified policy implementation rumours exacerbating supply shortages, forcing some scrap utilisation enterprises to raise raw material recycling prices to maintain production. Aluminium scrap prices are expected to hover at highs this week amid an intensified tug-of-war between sellers and buyers. Macro perspective, the ongoing nationwide crackdown on illegal tax rebates will profoundly reshape the cost structure of the secondary aluminium industry. Although scrap utilisation enterprises' purchasing quotes haven't yet reflected actual policy impacts during this transition period, industry uncertainty continues mounting. Long-term, downstream scrap users may further bargain down purchasing prices to offset potential tax cost increases, keeping downside risks for aluminium scrap prices. However, tight supply conditions, especially for shredded aluminium tensile scrap, will sustain suppliers' pricing power in the near term.
Silicon metal: On September 8, SMM oxygen-blown #553 silicon in east China traded at RMB 9,000-9,200 per tonne, flat from last Friday, while #441 silicon held steady at RMB 9,300-9,500 per tonne. In futures, prices moved downwards after a higher opening on Monday, with the session opening at RMB 8,740 per tonne, hitting lows of RMB 8,440 per tonne and highs of RMB 8,750 per tonne before settling at RMB 8,530 per tonne, down RMB 290 per tonne w-o-w. Warrant data from GFEX showed industrial silicon warrants totalled 49,922 lots on September 8, down 50 lots from the previous working day.
Overseas market: Current overseas ADC12 offers range between USD 2,500-2,530 per tonne, with import parity maintained around RMB 300 per tonne; Thailand's domestic ADC12 ex-VAT quotes temporarily stand at 83-84 baht/kg.
Inventory: SMM statistics indicate the daily social inventory of secondary aluminium alloy ingots across Foshan, Ningbo, and Wuxi totalled 34,877 tonnes on September 9, up 70 tonnes from the previous day and 1,097 tonnes from last Tuesday (September 2).
Summary: Aluminium prices fluctuated rangebound, while the secondary aluminium market remained generally stable, with most quotations holding flat. Currently, aluminium scrap supply is tight, and enterprise procurement costs have increased, providing support for ADC12 prices. Downstream consumption is showing a slow recovery, but enterprise order increments are limited, and the peak season effect has not yet fully materialised. It is expected that ADC12 prices will hover at highs in the short term due to cost support, but upside room is constrained by sluggish demand recovery and increasing social inventory. Subsequent attention should focus on raw material supply conditions, the pace of demand recovery, and policy guidance.
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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