Tightening supply combined with import pullback, tight aluminium scrap circulation underpins prices

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During the night session, aluminium alloy 2607 exhibited an overall trend of "retreat after rapid rise, hovering at lows." From the intraday perspective, prices first dipped quickly to around 23,180 after the opening, then rebounded as capital flowed in, briefly surging to around 23,340-23,350, with short-term sentiment somewhat recovering. However, selling pressure above remained evident, and prices gradually pulled back after hitting the intraday high. After 23:00, prices fell back below the average price line, entering a pace of being in the doldrums. Near the close, futures mostly moved sideways within the RMB 23,240-23,270 per tonne range, ultimately closing at RMB 23,255 per tonne, edging down from the previous settlement.

Spot-futures price spread daily report: According to SMM data, on May 12, the SMM ADC12 spot price's theoretical premium over the most-traded cast aluminium alloy contract (AD2606) at the 10:15 closing price narrowed to RMB 355 per tonne.

Warrant daily report: SHFE data showed that on May 12, total registered warrants for cast aluminium alloy stood at 33,884 tonnes, up 237 tonnes from the previous trading day. By region, Shanghai's total registered volume was 776 tonnes, unchanged from the previous trading day; Guangdong's total registered volume was 10,367 tonnes, down 30 tonnes; Jiangsu's total registered volume was 6,176 tonnes, up 177 tonnes; Zhejiang's total registered volume was 9,747 tonnes, up 90 tonnes; Chongqing's total registered volume was 4,600 tonnes, up 237 tonnes; Sichuan's total registered volume was 995 tonnes, flat from the previous trading day.

Aluminium scrap: On Tuesday, A00 aluminium prices edged down RMB 10 per tonne from the previous trading day, while the aluminium scrap market remained largely stable. Shredded aluminium tense scrap (priced based on aluminium content) traded in a mainstream range of RMB 20,500-21,000 per tonne (tax-exclusive). Imported zorba (Ningbo Port) saw its weekly trading range raised by RMB 200 per tonne to RMB 21,870-22,070 per tonne (tax-inclusive). On the price difference between A00 aluminium and aluminium scrap, on May 12, the price difference between A00 aluminium and mixed aluminium extrusion scrap free of paint in Foshan was recorded at RMB 2,723 per tonne, and the price difference between A00 aluminium and shredded aluminium tense scrap was RMB 2,078 per tonne. Supply side, the tightening trend in compliant invoice sources intensified, raw material prices swung wildly, and aluminium scrap yards generally held back from selling and held prices firm. High LME prices led import traders to adopt cautious strategies, and subsequent imports are expected to pull back. Demand side, the traditional off-season combined with prominent compliant invoice issues led some regional enterprises to reduce or halt production. Wrought aluminium alloy scrap was supported by secondary aluminium plate/sheet and strip operating rates, but the support was limited. Downstream procurement was mainly driven by rigid demand, with strong wait-and-see sentiment. The off-season effect on the demand side continued, with downstream secondary aluminium enterprises cautiously watching the market. Procurement was mainly small-lot restocking for rigid demand. The divergence between aluminium tense scrap and wrought aluminium alloy scrap persisted, order growth remained limited, and vigilance is still needed against market risks from aluminium price fluctuations and tight supply.

Silicon metal: On May 12, SMM east China non-oxygen blown #553 was stable from the previous day; oxygen-blown #553 was stable from the previous day; #521 was stable from the previous day; #441 was stable from the previous day; #421 was stable from the previous day; #421 for silicone use was stable from the previous day; #3303 was stable from the previous day. Silicon prices in Kunming, Huangpu Port, Tianjin, Northwest China, Xinjiang, Shanghai, and Sichuan remained stable.

Markets outside China: Current import ADC12 quotes remained at the high range of USD 3,320-3,400 per tonne, with instant import losses still exceeding RMB 3,000 per tonne, and the theoretical import window continued to stay closed.

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.