Futures Market: Overnight, the most-traded AD2511 cast aluminium alloy futures contract opened at RMB 19,945 per tonne, reaching a high of RMB 20,050 per tonne and a low of RMB 19,915 per tonne, before closing at RMB 20,015 per tonne, up RMB 75 per tonne or 0.38 per cent from the previous trading day. Trading volume stood at 1,480 lots, with open interest at 9,082 lots, primarily driven by an increase in long positions.
Spot-Futures Price Spread Daily Report: According to SMM data, on July 10, the SMM ADC12 spot price was at a theoretical premium of RMB 145 per tonne over the closing price of the most-traded cast aluminium alloy futures contract (AD2511) at 10:15 a.m.
Aluminium Scrap: On Thursday, the spot price of primary aluminium rose by RMB 160 per tonne from the previous trading day, with SMM A00 spot aluminium closing at RMB 20,820 per tonne. The aluminium scrap market prices generally continued to rebound.
By product, baled UBC prices rebounded by RMB 50 per tonne MoM, slightly following the aluminium price increase.
Regionally, Shanghai, Jiangsu, Shandong, and other regions closely followed aluminium price movements, with price adjustments ranging from RMB 100-150 per tonne. In Guizhou, Hunan, Guangdong, Jiangxi and other regions, price adjustments lagged behind aluminium price movements, with quotes remaining flat.
According to secondary aluminium enterprises, the current low prices of secondary aluminium alloys, coupled with the difficulty in scrap recycling, and constrained by poor production starts, limit the upside room for price increases.
This week, the aluminium scrap market is expected to hover at highs, with cautious price adjustments. Shredded aluminium tense scrap, supported by tight supply, has strong price resilience and is expected to fluctuate rangebound within the RMB 15,800-17,400 per tonne range.
Baled UBC may continue its downward trend due to off-season demand pressure, possibly dipping to RMB 15,200-15,700 per tonne. Subsequent attention should be paid to marginal changes in raw material circulation and signals of terminal order recovery.
Overseas Market: The CIF import price of ADC12 remained at USD 2,450-2,480 per tonne, with the import spot price hovering around RMB 19,200 per tonne and immediate import losses maintained at around RMB 900 per tonne. The local tax-excluded price of ADC12 in Thailand was concentrated at THB 82-83 per kg.
Inventory: According to SMM statistics, on July 10, the social inventory of secondary aluminium alloy ingots in major domestic consumption areas was 26,766 tonnes, an increase of 3,534 tonnes from the previous Thursday. Among them, Foshan region saw an increase of 1,896 tonnes and Ningbo region saw an increase of 1,688 tonnes contributing the most to the overall increase.
Summary: On Thursday, aluminium prices extended their gains, with SMM ADC12 prices rising by RMB 100 per tonne to RMB 20,100 per tonne. Recently, both domestic and overseas aluminium scrap supplies have tightened, directly leading to a significant increase in the difficulty of raw material procurement for secondary aluminium plants.
The competition for "scrap" in the market has intensified, while production costs continue to rise and the scope of enterprise production losses continues to expand, prompting manufacturers to raise their quotes. Constrained by both raw material shortages and weakening demand, multiple secondary aluminium manufacturers have been forced to cut production, with some even entering a state of shutdown.
Overall, the ongoing balance between strong cost support and weak demand suppression is expected to persist, with ADC12 prices maintaining a rangebound fluctuation pattern in July.
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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