Futures: Overnight, the most-traded AD2511 cast aluminium alloy futures contract opened at RMB 20,010 per tonne, with a high of RMB 20,015 per tonne, a low of RMB 19,945 per tonne, and closed at RMB 19,970 per tonne, down RMB 35 per tonne or 0.17 per cent from the previous close. Trading volume was 865 lots, and open interest was 8,213 lots, with bulls mainly reducing their positions.
Spot-Futures Price Spread Daily Report: According to SMM data, on August 5, the SMM ADC12 spot price was at a theoretical premium of RMB 105 per tonne over the closing price of the most-traded cast aluminium alloy futures contract (AD2511) at 10:15 a.m.
Aluminium Scrap: On Tuesday, the spot primary aluminium price rebounded by RMB 40 per tonne from the previous trading day, with SMM A00 spot closing at RMB 20,520 per tonne. The aluminium scrap market prices generally increased. Baled UBC aluminium scrap was quoted at RMB 15,250-15,750 per tonne (tax-exclusive), and shredded aluminium tense scrap (water price) was quoted at RMB 16,800-17,300 per tonne (tax-exclusive price). Both baled UBC and shredded aluminium tense scrap (water price) prices increased by RMB 100 per tonne. It is expected that the price center of the aluminium scrap market this week may further return to off-season levels. The bearish expectations for primary aluminium (such as macro pressure and high inventory) have not dissipated, coupled with the continued weak demand during the off-season, limiting the upside room for aluminium scrap as a whole; however, the tight supply of raw materials still provides medium and long-term bottom support. Shredded aluminium tense scrap, supported by the supply side, has relatively strong price resilience and is expected to fluctuate range-bound within RMB 16,500-17,000 per tonne (tax-exclusive).
Overseas Market: Overseas ADC12 quotes remained stable at USD 2,460-2,480 per tonne, with imported spot prices remaining flat at around RMB 19,300 per tonne, maintaining an immediate loss status for imports. Local ADC12 quotes in Thailand were concentrated at 82-83 Thai baht per kg (tax-exclusive).
Inventory: According to SMM statistics, on August 5, the daily social inventory of secondary aluminium alloy ingots in Foshan, Ningbo, and Wuxi totaled 31,283 tonnes, down 63 tonnes from the previous trading day and up 347 tonnes from Tuesday (July 29) of the previous week.
Summary: Although aluminium prices only rebounded slightly on Tuesday, due to the reduced output of new scrap during the off-season and the suppression of dismantling volumes by high temperatures, the tight supply of aluminium scrap led to a rapid price increase, increasing the cost pressure for secondary aluminium plants and strengthening their willingness to lower prices. However, the demand side was dragged down by high temperatures, leading to a decline in downstream operating rates, which resulted in reduced orders for secondary aluminium plants and sluggish market transactions, struggling to rise in price. Overall, cost support will continue to limit the downside room for prices, while high social inventory and persistently sluggish actual demand suppress upward momentum. The ADC12 price is expected to fluctuate range-bound in the short term.
Also read: Weakened cost support coupled with sluggish demand, ADC12 aluminium alloy prices consolidate weakly
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 information.
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