Futures Market: On the night of last Friday, the most-traded cast aluminium alloy AD2511 futures contract opened at RMB 19,870 per tonne, with a high of RMB 19,890 per tonne, a low of RMB 19,800 per tonne, and closed at RMB 19,875 per tonne, down RMB 45 per tonne or 0.23 per cent from the previous close. Trading volume was 608 lots, and open interest was 8,447 lots, with bears mainly increasing their positions.
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Spot-futures price spread daily report: According to SMM data, on August 1, the SMM ADC12 spot price was at a theoretical premium of RMB 120 per tonne over the closing price of the most-traded cast aluminium alloy futures contract (AD2511) at 10:15 a.m.
Aluminium scrap: Last Friday, the spot price of primary aluminium fell by RMB 60 per tonne from the previous trading day. SMM A00 spot aluminium closed at RMB 20,520 per tonne, and the overall aluminium scrap market prices declined. Baled UBC aluminium scrap was quoted at RMB 15,200-15,700 per tonne (tax not included), and shredded aluminium tense scrap (water price) was quoted at RMB 16,700-17,200 per tonne (tax not included).
Regarding the price difference between A00 aluminium and aluminium scrap, the Shanghai mechanical casting aluminium scrap price difference narrowed by RMB 6 per tonne M-o-M to RMB 1,944 per tonne, while the price difference between A00 aluminium and mixed aluminium extrusion scrap free of paint in Foshan widened by RMB 59 per tonne M-o-M to RMB 1,998 per tonne. It is expected that the price centre 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 overall upside room for aluminium scrap. However, the tight supply of raw materials still provides medium and long-term bottom support. Shredded aluminium tense scrap is supported by the supply side, showing relatively strong price resilience.
Silicon metal: (1) Price: Last week, the spot and futures prices of silicon metal weakened. As of last Friday, east China oxygen-blown #553 silicon metal was priced at RMB 9,500-9,800 per tonne, and #441 silicon metal was priced at RMB 9,800-10,100 per tonne, down about RMB 300 per tonne W-o-W. In the futures market, the most-traded SI2509 silicon metal futures contract fluctuated considerably around RMB 8,500-9,600 per tonne this week, closing at RMB 8,500 per tonne on August 1, down RMB 415 per tonne within the week.
(2) Social inventory: According to SMM statistics, the total social inventory of silicon metal in major regions was 540,000 tonnes on July 31, up 5,000 tonnes WoW. Among them, the social general warehouse inventory was 119,000 tonnes, down 1,000 tonnes WoW, and the social delivery warehouse inventory was 421,000 tonnes (including unregistered warrants and spot cargo), up 6,000 tonnes W-o-W (excluding Inner Mongolia, Gansu, etc.).
Overseas market: Overseas ADC12 quotes held steady 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 (tax not included) were concentrated at 82-83 baht per kg.
Inventory: According to SMM statistics, the daily social inventory of secondary aluminium alloy ingots in Foshan, Ningbo, and Wuxi was 31,319 tonnes on August 1, up 93 tonnes from the previous trading day and up 1,434 tonnes from last Friday.
Summary: Aluminium prices declined for two consecutive days last week, with a cumulative drop of RMB 150 per tonne, while aluminium scrap prices also moved lower. Coupled with falling prices of auxiliary materials such as copper and silicon metal, the cost support for secondary aluminium alloy weakened.
Meanwhile, recent end-use consumption remained sluggish, with weak demand leading to thin actual transactions and market prices generally following the downtrend. The SMM ADC12 price held steady at RMB 20,100 per tonne. However, short-term aluminium scrap supply remains tight, and high costs continue to provide some price support. Overall, cost support will continue to limit downside room, while elevated social inventory and persistently sluggish actual demand will cap upside room. The ADC12 price is expected to remain in a narrow range in the doldrums in the near term.
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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