7.7 SMM Morning Comment on Cast Aluminum Alloy
Futures: On Friday night, the most-traded AD2511 cast aluminum alloy futures contract opened at the highest point of 19,885 yuan/mt, then fluctuated downward, hitting bottom at 19,760 yuan/mt, and finally closed at 19,785 yuan/mt, down 90 yuan/mt or 0.45% from the previous trading day. Trading volume was 1,720 lots, and open interest was 9,004 lots, with bulls mainly reducing their positions.
Spot-Futures Price Spread Report: According to SMM data, on July 4, the theoretical premium of SMM ADC12 spot price over the closing price of the most-traded cast aluminum alloy futures contract (AD2511) at 10:15 a.m. narrowed to 180 yuan/mt.
Aluminum Scrap: On Friday, the spot price of primary aluminum fell 90 yuan/mt from the previous trading day. SMM A00 aluminum closed at 20,770 yuan/mt, and the overall market price of aluminum scrap declined slightly. By product, baled UBC prices fell 50 yuan/mt MoM, following the aluminum price decline. By region, Shanghai, Jiangsu, Shandong, and other places closely followed the aluminum price trend, with price adjustments ranging from 50-100 yuan/mt. In Jiangxi, Foshan, Guizhou, Hunan, and other places, price adjustments lagged behind the aluminum price trend, with quotes remaining unchanged. In terms of the price difference between A00 aluminum and aluminum scrap, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan narrowed by 90 yuan/mt to 1,767 yuan/mt, and the price difference between mechanical casting aluminum scrap and A00 aluminum in Shanghai narrowed by 10 yuan/mt to 1,836 yuan/mt. This week, the aluminum scrap market is expected to hover at highs and adjust prices cautiously.
Overseas Market: The CIF import price of ADC12 remained at 2,450-2,480 US dollars/mt, the import spot price was around 19,200 yuan/mt, and the immediate import loss was around 800 yuan/mt. The local tax-free price of ADC12 in Thailand was concentrated at 82-83 Thai baht/kg.
Inventory: According to SMM statistics, on July 4, the daily social inventory of secondary aluminum alloy ingots in Foshan, Ningbo, and Wuxi totaled 21,988 mt, up 356 mt from the previous trading day and 2,466 mt from last Friday.
Summary: On Friday, aluminum prices dropped back slightly, and the secondary aluminum market remained stable. The SMM ADC12 price range was maintained at 20,000-20,200 yuan/mt. Entering July, factors such as the high-temperature off-season and high aluminum prices continued to impact downstream orders, with some downstream companies initiating production reduction modes. Despite active inquiries from futures-to-spot traders and an increase in trading volume of delivery brands, the end-use consumption market remained sluggish, posing a key resistance to price increases. Faced with a dual squeeze of raw material supply deficits and weak market demand, some secondary aluminum manufacturers have experienced short-term furnace shutdowns for maintenance or reduced operating rates. Overall, in the absence of substantial demand improvements, prices encounter resistance, but the cost support logic remains, and secondary aluminum alloy prices are expected to fluctuate rangebound in the short term.
[The information provided is for reference only. This article does not constitute direct investment research advice. Clients should exercise caution in decision-making and not use it to replace independent judgment. Any decisions made by clients are unrelated to SMM.】
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