Futures Market: Overnight, the most-traded AD2511 cast aluminium alloy futures contract opened at RMB 19,820 per tonne, reaching a high of RMB 19,960 per tonne and a low of RMB 19,780 per tonne, before closing at RMB 19,945 per tonne, up RMB 115 per tonne or 0.58 per cent from the previous trading day. Trading volume stood at 1,930 lots, with open interest at 8,658 lots, primarily driven by longs increasing their positions.
Spot-Futures Price Spread Daily Report: According to SMM data, on July 9, the theoretical premium of SMM ADC12 spot price over the closing price of the most-traded cast aluminium alloy futures contract (AD2511) at 10:15 a.m. narrowed to RMB 130 per tonne.
Industry Updates: (1) As announced by SHFE, as of the close on July 9, the cast aluminium alloy futures had been trading for 22 consecutive trading days, with a cumulative trading volume of 205,700 lots and open interest of 10,200 lots after the close on that day, equivalent to a spot cargo scale of 102,000 mt, accounting for approximately 27 per cent of the domestic monthly consumption of cast aluminium alloy. The cast aluminium alloy options had a cumulative trading volume of 41,500 lots and open interest of 6,000 lots after the close on that day. Moving forward, SHFE will continue to intensify market cultivation efforts, persistently carry out market promotion and training activities, facilitate the functioning of the market, and ensure the smooth first delivery of cast aluminium alloy futures. Meanwhile, SHFE will closely monitor market operations and optimise the rules for cast aluminium alloy futures in a timely manner based on feedback from all market participants, striving to meet the risk management needs of the aluminium industry and better serve and lead the development of the real economy. (2) On July 9, the Ministry of Industry and Information Technology launched an "Online Window for Reporting Issues Related to Key Automakers' Compliance with Payment Cycle Commitments," accepting reports from small and medium-sized enterprises regarding key automakers' failure to comply with payment cycle commitments and inadequate implementation of the "Regulation on Ensuring Payments to Small and Medium-Sized Enterprises."
Aluminium Scrap Market: On Wednesday, the spot price of primary aluminium rose by RMB 60 per tonne from the previous trading day, with SMM A00 spot closing at RMB 20,660 per tonne. Aluminium scrap market prices generally continued to rebound. By product, baled UBC prices rebounded by RMB 50 per tonne from the previous day, following the upward trend in aluminium prices. By region, Shanghai, Jiangsu, Shandong, and other regions closely followed aluminium price movements, with price adjustments ranging from RMB 50-100 per tonne. In Guizhou, Hunan, and other regions, price adjustments lagged behind aluminium price movements, with quotes remaining flat. After collectively raising aluminium scrap prices on Tuesday, Jiangxi region chose to maintain stability yesterday, digesting the active price adjustment sentiment from the previous day. This week, the aluminium scrap market is expected to hover at highs, with cautious price adjustments. Shredded aluminium tense scrap prices remain resilient due to tight supply.
Overseas Markets: 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. Due to a slight depreciation of the RMB, the immediate loss from imports has widened to approximately RMB 900 per tonne. In Thailand, the local tax-excluded quote for ADC12 is concentrated at 82-83 Thai baht/kg.
Inventory: According to SMM statistics, the combined daily social inventory of secondary aluminium alloy ingots in Foshan, Ningbo, and Wuxi reached 24,546 tonnes on July 9, increasing by 299 tonnes from the previous trading day and 3,267 tonnes W-o-W.
Summary: In the spot market, SMM A00 aluminium prices rose by RMB 60 per tonne to RMB 20,660 per tonne on Wednesday, while SMM ADC12 prices temporarily stabilised at RMB 20,000 per tonne. Recently, both domestic and overseas aluminium scrap supplies have tightened, directly causing significant difficulties for secondary aluminium plants in raw material procurement. Market competition for "material scrambling" has intensified, while production costs continued to rise and corporate losses on production expanded. Constrained by both raw material shortages and weakening demand, multiple secondary aluminium manufacturers have been forced to implement production cuts, with some even halting operations. Overall, the strong cost support and weak demand suppression remain in a prolonged tug-of-war, and ADC12 prices are expected to maintain a rangebound pattern with a weak bias throughout 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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