Futures: The most-traded cast aluminium alloy AD2512 contract opened at the day's low of RMB 20,385 per tonne overnight, hit a high of RMB 20,450 per tonne, and finally closed at RMB 20,385 per tonne, flat from the previous close, with a 0per cent change. Trading volume was 661 lots, and open interest was 11,768 lots, mainly driven by an increase in long positions.
Basis report: According to SMM data, on September 25, the theoretical spot-futures price spread for SMM ADC12 spot aluminium against the most-traded cast aluminium alloy contract (AD2512) at the 10:15 closing price was a premium of RMB 495 per tonne.
Warrant report: On September 25, the total registered warrants for cast aluminium alloy amounted to 19,181 per tonne, an increase of 3,968 per tonne from the previous trading day. By region: Shanghai (3,073 per tonne, up 0 per tonne), Guangdong (1,571 per tonne, up 0 per tonne), Jiangsu (5,579 per tonne, up 2,374 per tonne), Zhejiang (5,628 per tonne, up 845 per tonne), Chongqing (3,330 per tonne, up 749 per tonne), and Sichuan (0 per tonne, up 0 per tonne).
Industry dynamics: The operating rate of leading secondary aluminium enterprises rose 0.7 percentage points w-o-w to 56.6per cent this week. Currently, large enterprises have relatively optimistic orders, which are stable with an upward trend, and companies are actively fulfilling orders, driving the operating rate higher. However, due to the impact of Typhoon Hagibis, multiple areas in Guangdong Province initiated the "Five Stops" emergency response, leading to a complete suspension of production and logistics transportation at local secondary aluminium plants. Local enterprises basically halted production for 1–3 days, dragging down the operating rate in the region.
On the afternoon of the 24th, many areas gradually lifted the "Five Stops" measures, and enterprise production and transportation resumed in an orderly manner. Looking ahead to next week, coinciding with the Mid-Autumn Festival and National Day holidays, production arrangements in the secondary aluminium industry are diverging: some manufacturers plan to maintain production without stoppage; some enterprises intend to arrange about 3 days off; others have not yet finalised specific holiday plans and need to clarify further based on downstream customer demand and order situations. Overall, holiday factors will have a certain impact on the industry's production pace, and the overall operating rate in the secondary aluminium industry is expected to experience a phased pullback next week.
Aluminium scrap side: Spot primary aluminium prices rebounded on Thursday compared to the previous trading day, with SMM A00 aluminium closing at RMB 20,770 per tonne, and aluminium scrap market prices generally followed the increase. With the National Day holiday approaching, enterprises in parts of Henan, Jiangxi, and Shandong reported that they had started stockpiling production raw materials in advance for the holiday.
Amid the shortage of aluminium scrap, overall market prices remained high. Baled UBC pulled back RMB 50 per tonne m-o-m from the previous trading day, while shredded aluminium tense scrap (priced based on aluminium content), scrap wheel hubs, and mechanical casting aluminium scrap rose RMB 100 per tonne m-o-m. Aluminium tense scrap prices in Anhui and Hubei remained unchanged. Aluminium scrap prices are expected to hover at highs next week. On one hand, the tight supply fundamentals of aluminium scrap are difficult to alleviate in the short term, and the supporting effect of pre-holiday downstream stocking demand on prices continues to ferment.
On the other hand, there has been no further feedback on the implementation of domestic tax cleanup policies, but in the long term, scrap utilisation enterprises still have the intention to drive down prices. Overall, the mainstream price range for shredded aluminium tensile scrap (priced based on aluminium content) is expected to fluctuate around RMB 17,300-17,800 per tonne, while baled UBC prices hover near RMB 15,600-16,100 per tonne. The market needs to focus on the sustainability of downstream stocking demand before the National Day holiday, the actual implementation pace of tax policies, and further guidance from primary aluminium price trends.
Silicon metal: (1) Prices: Spot silicon metal prices remained firm this week, with limited low-priced supply in the market. Combined with increased price acceptance from downstream users' stocking demand, the centre of spot transaction prices for silicon metal maintained an upward trend w-o-w. As of September 25, SMM oxygen-blown #553 silicon in east China was at RMB 9,400-9,600 per tonne, up RMB 150 per tonne w-o-w; #441 silicon was at RMB 9,600-9,800 per tonne, up RMB 100 per tonne w-o-w; and #3303 silicon was at RMB 10,500-10,600 per tonne, up RMB 100 per tonne w-o-w. (2) Social inventory: According to SMM statistics, the social inventory of silicon metal in major regions totalled 543,000 per tonne on September 25, flat w-o-w. This included 120,000 per tonne in general social warehouses (flat w-o-w) and 423,000 per tonne in delivery social warehouses (including unregistered warrants and spot portions, flat w-o-w). Recently, some silicon metal cargoes from Xinjiang have been gradually transferred to areas like Tianjin, leading to significant inventory changes between regions. Pre-holiday downstream stocking demand increased, resulting in good warehouse inflow and outflow volumes. (Excluding Inner Mongolia, Gansu, etc.)
Overseas market: Overseas ADC12 offers were concentrated at USD2,530-2,560per tonne, while domestic spot prices were at RMB 20,000-20,300 per tonne, with immediate import losses widening to around RMB 400 per tonne. Local ADC12 ex-tax offers in Thailand remained at 81-82 baht per kg.
Inventory: According to SMM statistics, the social inventory of secondary aluminium alloy ingots in mainstream domestic consumption areas was 55,700 per tonne on September 25, up 400 per tonne from last Thursday.
Summary: On Friday, the SMM A00 aluminium price rose RMB 90 per tonne from the previous day to RMB 20,770 per tonne, while the SMM ADC12 price increased RMB 50 per tonne to RMB 20,900 per tonne. Pre-holiday raw material stocking demand from secondary aluminium plants was constrained by tight aluminium scrap resources, highlighting procurement pressure. Demand side, as the National Day and Mid-Autumn Festival holidays overlapped this year, downstream die-casting enterprises extended their holiday duration by 1-2 days YoY, with most enterprises taking 3-8 days off (a few maintained production).
Despite pre-holiday stocking demand driving a recovery in transactions among manufacturers and traders, the overall increase remains limited. Overall, cost support from aluminium scrap and pre-holiday stocking demand provides a floor for ADC12 prices. However, extended downstream holidays, limited restocking increments, and continuous inventory buildup constrain upside potential. ADC12 prices are expected to fluctuate rangebound before the holiday, with close attention needed on raw material availability, holiday inventory accumulation, and post-holiday demand recovery.
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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