Futures: In the overnight session, the aluminium alloy 2604 contract moved downwards after a higher opening and fluctuated downward. After opening at RMB 23,295 per tonne, it rose to RMB 23,420 per tonne, then continued to pull back, bottoming at RMB 23,000 per tonne and closed at RMB 23,170 per tonne late in the session, down 1.07 per cent from the previous close. Open interest continued to decline, with a notable reduction in long positions; trading volume edged up and the price centre moved lower.

Spot-Futures Price Spread Daily: According to SMM data, on March 5, the theoretical premium of the SMM ADC12 spot price over the 10:15 closing price of the most-traded cast aluminium alloy contract (AD2604) narrowed to RMB 920 per tonne.

Warrant Daily: SHFE data showed that on March 5, total registered cast aluminium alloy warrants were 60,182 tonnes, down 932 tonnes from the previous trading day. Of this total, Shanghai registered 5,706 tonnes, down 240 tonnes; Guangdong 20,879 tonnes, down 29 tonnes; Jiangsu 7,718 tonnes, down 212 tonnes; Zhejiang 20,349 tonnes, down 391 tonnes; Chongqing 4,354 tonnes, down 30 tonnes and Sichuan 1,173 tonnes, down 30 tonnes.

Aluminium scrap: This week, China’s aluminium scrap market basically fully resumed normal production and shipment, but amid the impact of US-Iran geopolitical tensions, prices moved in tandem with primary aluminium and showed strong follow-up gains. As of March 5, 2026, the SMM A00 aluminium price closed at RMB 25,120 per tonne, up a cumulative RMB 1,710 per tonne for the week. Mainstream aluminium scrap categories were raised in tandem: baled UBC closed at RMB 18,100-18,600 per tonne (tax excluded), and shredded aluminium tense scrap (priced based on aluminium content) closed at RMB 20,500-21,050 per tonne (tax excluded).

As for the price difference between A00 aluminium and aluminium scrap, on February 5, the price difference between A00 aluminium and mixed aluminium extrusion scrap free of paint in Foshan was RMB 3,688 per tonne and the price difference between A00 aluminium and shredded aluminium tense scrap was RMB 2,881 per tonne.

Supply side, after the Lantern Festival, domestic aluminium scrap yards basically resumed a normal pace of shipments, but amid rising raw material costs and tighter enforcement of the reverse invoicing policy, compliant supply was tight, triggering a scramble in the market.

Demand side, downstream scrap utilisation enterprises saw post-holiday order recovery and operating rates fall short of expectations; willingness to restock was weak, with purchases still mainly driven by rigid demand. Only a small number of traders engaged in stockpiling and held back sales, waiting for prices to rise, and the pattern of weak supply and weak demand persisted.

The aluminium scrap market is expected to hold up well at elevated levels next week, with the mainstream range for shredded aluminium tense scrap (priced based on aluminium content) hovering between RMB 20,300 and RMB 20,900 per tonne (tax excluded). Post-holiday production order gradually recovered and supply release further eased, but downstream processing enterprises saw slow order recovery; overall transactions are expected to remain sluggish and the tug-of-war between sellers and buyers is set to intensify in the short term.

Close attention should be paid to the impact of the US-Iran conflict on primary aluminium supply and transportation, downstream work-resumption progress and changes in recycling policies and be alert to the heightened risk of price fluctuations.

Silicon metal: Boosted by bullish market news, silicon metal futures prices stabilised and recovered. The most-traded silicon metal contract closed yesterday at RMB 8,565 per tonne. Quotes from silicon enterprises were steady or raised by around RMB 100 per tonne and east China oxygen-blown #553 silicon was quoted around RMB 9,100-9,200 per tonne.

With more downstream players staying on the sidelines, the market saw more purchasing as needed and silicon metal prices fluctuated and consolidated with limited upside room.

Social inventory: According to SMM statistics, as of March 5, total social inventory of silicon metal in major regions stood at 553,000 tonnes, down 7,000 tonnes WoW (excluding Inner Mongolia, Ningxia, Gansu and other regions).

Overseas market: Overseas ADC12 quotes surged sharply to USD 3,190-3,250 per tonne, while the domestic price increase lagged behind and spot import losses quickly widened to more than RMB 1,000.

Summary: The secondary aluminium alloy market continued its uptrend today, with producers generally raising quotes by RMB 300-600 per tonne. SMM ADC12 prices have risen to RMB 24,700-24,900 per tonne. Cost support was significant. Driven by elevated raw material prices and losses on earlier low-priced orders, enterprises’ willingness to raise prices strengthened markedly; even with limited downstream acceptance, they still proactively increased prices in line with the market.

Currently, high prices have clearly suppressed downstream procurement, with replenishment mainly via small orders for rigid demand and overall transactions were relatively sluggish.

In the short term, ADC12 prices are expected to hold up well: on the one hand, tensions in the Middle East have intensified and aluminium capacity in Qatar, Bahrain, Mozambique and other regions faces shutdown risks, with overseas supply disruptions strengthening bullish sentiment; on the other hand, domestic production resumptions have been slow, supply releases fell short of expectations and together with strong cost support, downside room for prices was limited.

Going forward, market focus will shift to the actual realisation of end-use demand: if downstream orders are released significantly and primary aluminium prices remain strong, the ADC12 price centre is expected to move further higher; if demand recovery is insufficient, the market will most likely shift into a fluctuating consolidation phase.

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.