Futures: Overnight, the most-traded 2604 aluminium alloy contract closed at RMB 23,645 per tonne, down RMB 25 from the previous trading day’s settlement price, a decline of 0.11 per cent. The high was RMB 23,705 per tonne, and the low was RMB 23,310 per tonne, with a fluctuation of RMB 395. The current VR value was 101.18, in the neutral range, indicating a relatively balanced tug-of-war between bulls and bears, with no obvious extreme expansion or contraction in trading activity. Trading volume and open interest fell in tandem, market trading sentiment cooled, and a wait-and-see mood was strong; in the short term, prices were likely to maintain sideways movement.

Spot-futures price spread daily: According to SMM data, on March 9, the SMM ADC12 spot price posted a theoretical premium of RMB 880 per tonne over the 10:15 closing price of the cast aluminium alloy, the most-traded contract (AD2604).

Warrant daily: SHFE data showed that on March 9, total registered cast aluminium alloy warrants were 58,099 tonnes, down 630 tonnes from the previous trading day. Of this, Shanghai totalled 5,409 tonne, down 209 tonne; Guangdong 19,813 tonne, down 487 tonne; Jiangsu 7,419 tonne, down 58 tonne; Zhejiang 19,417 tonne, down 541 tonne; Chongqing 4,234 tonne, down 60 tonne; and Sichuan 1,807 tonne, up 725 tonne.

Aluminium scrap: Geopolitical positives continued to fluctuate, driving yesterday’s spot primary aluminium to rise sharply by RMB 750 per tonne from the previous trading day, and the aluminium scrap market rose across the board in tandem. For the price difference between A00 aluminium and aluminium scrap, on March 9, the price difference between A00 aluminium and mixed aluminium extrusion scrap free of paint in Foshan was RMB 3,748 per tonne, and the price difference between A00 aluminium and shredded aluminium tensile scrap was RMB 2,834 per tonne. The aluminium scrap market was expected to hold up well at elevated levels this week, with the mainstream range for shredded aluminium tensile scrap (priced based on aluminium content) running around RMB 20,300-20,900 per tonne (tax excluded). 

Post-holiday production order gradually recovered, and supply release further loosened, but downstream processing enterprises’ order recovery was slow; overall transactions were expected to remain sluggish, and the supply and demand tug-of-war was 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 resumption progress, and changes in recycling policies, and vigilance is needed against heightened price fluctuation risks.

Silicon metal: Last week, silicon metal prices fell first and then rose; SMM east China oxygen-blown #553 silicon was at RMB 9,000-9,200 per tonne, and 441# silicon at RMB 9,200-9,500 per tonne. Affected by policies and news flow, futures prices recovered; silicon suppliers’ quoted price centre edged up from earlier levels, and downstream traded on an as-needed basis. Demand reflected routine post–Chinese New Year work and production resumptions, and silicon metal prices were mainly volatile.

Overseas market: On the import side, driven by a sharp rise in LME aluminium prices and an uptick in overseas demand, overseas ADC12 offers rose to USD 3,240-3,320per tonne, while domestic price gains were relatively limited, and the import window quickly turned loss-making.

Summary: Yesterday, the SMM ADC12 price rose by RMB 500 per tonne, with the price centre of market quotations moving up significantly. Most producers’ price adjustments were concentrated in the RMB 500–600 per tonne range. Recently, raw material prices have continued to strengthen, and the cost side has risen rapidly, providing a clear lift to enterprise quotations. However, downstream demand has remained relatively stable. 

Most enterprises reported that overall orders and inquiry activity were average, and downstream purchasing is still mainly restocking on an as-needed basis. Supported by cost push and market expectations, enterprises have shown a clear willingness to raise prices. In the short term, against the backdrop of cost support and mild supply release, ADC12 prices are expected to hold up well. 

The medium-term trend will still depend on the recovery of end-use consumption. If industry orders in the die-casting sector increase significantly, the price centre is expected to move further upward; if demand recovery falls short of expectations, coupled with a continued rise in the operating rate on the supply side, prices will shift from elevated levels into rangebound consolidation.

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.