SMM Cast Aluminum Alloy Morning Comment on Nov. 26
Futures: The most-traded cast aluminum alloy 2601 futures contract opened at 20,665 yuan/mt overnight, hit a high of 20,755 yuan/mt, a low of 20,640 yuan/mt, and finally closed at 20,655 yuan/mt, down 50 yuan/mt or 0.24% from the previous close. Trading volume was 3,374, and open interest was 8,236. The K-value was 35.22, D-value 35.59, and J-value 34.47, all in the relatively weak range below 50, not yet entering the oversold zone. From the candlestick trend, the contract continued the recent adjustment trend, and open interest decreased significantly. Combined with the price pullback, it reflected sentiment dominated by bears but with some weakening selling pressure. In the short term, attention should be paid to the effectiveness of support near 20,640 yuan/mt; if broken, it may test lower levels.
Basis Daily Report: According to SMM data, on Nov. 25, the SMM ADC12 spot price showed a theoretical premium of 595 yuan/mt over the closing price of the most-traded cast aluminum alloy futures contract (AD2601) at 10:15.
Warrant Daily Report: SHFE data showed that on Nov. 25, the total registered warrant volume for cast aluminum alloy was 62,895 mt, an increase of 993 mt from the previous trading day. The total registered volume by region was: Shanghai 4,757 mt (unchanged), Guangdong 20,181 mt (up 275 mt), Jiangsu 11,000 mt (unchanged), Zhejiang 20,529 mt (up 718 mt), Chongqing 6,308 mt (unchanged), and Sichuan 120 mt (unchanged).
Aluminum Scrap: On Tuesday, spot primary aluminum prices fluctuated and rose compared to the previous trading day. The SMM A00 spot price closed at 21,440 yuan/mt, and the aluminum scrap market followed the increase collectively. Baled UBC was quoted in the range of 16,050-16,550 yuan/mt (tax excluded), and shredded aluminum tense scrap (priced based on aluminum content) was quoted in the range of 18,000-18,500 yuan/mt (tax excluded). The price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was 2,501 yuan/mt, and the price difference between A00 aluminum and bare bright aluminum wire in Jiangsu was 880.6 yuan/mt. The aluminum scrap market was expected to hover at highs this week, with the mainstream price range for shredded aluminum tense scrap (priced based on aluminum content) likely fluctuating between 17,800-18,600 yuan/mt. The market was expected to continue the high-level tug-of-war between sellers and buyers. It is recommended to closely track the price trend of primary aluminum and adjustments in downstream enterprises' purchasing strategies.
Silicon Metal: (1) Prices: Spot silicon metal prices remained stable. Yesterday, SMM oxygen-blown #553 silicon in east China was at 9,400-9,600 yuan/mt, flat from the previous day; #441 silicon was at 9,600-9,800 yuan/mt, flat from the previous day. In the futures market, the SI2601 contract fluctuated in the range of 8,940-9,050 yuan/mt. Downstream enterprises purchased as needed. Approaching December, attention should be paid to environmental protection-related situations in the north. 2) Production: In November, the main reduction in silicon metal supply variables was seen in the Sichuan and Yunnan regions, with a slight increase in the north; overall, it maintained a significant MoM decrease, and the national total supply showed a decline.
Overseas market: Current overseas ADC12 quotation range remained flat at $2,600–2,630/mt, with import immediate losses above 500 yuan/mt, and the import window continued to be closed.
Inventory: According to SMM statistics, as of November 25, the daily social inventory of secondary aluminum alloy ingots in Foshan, Ningbo, and Wuxi totaled 49,904 mt, down 296 mt from the previous trading day.
Summary: Spot side, aluminum prices edged up on Tuesday, with the SMM A00 aluminum spot price quoted at 21,440 yuan/mt, up 80 yuan/mt from the previous trading day. In the secondary aluminum market, ADC12 prices held steady at 21,350 yuan/mt. Against the backdrop of rising aluminum prices, the market generally maintained stable quotations, with strong wait-and-see sentiment and low willingness among producers to adjust prices. Currently, ADC12 prices are strongly supported at the bottom due to cost support and tight supply; however, constrained by cautious demand-side sentiment triggered by aluminum price fluctuations, upside room for prices is limited. ADC12 prices are expected to move sideways in the range of 21,200–21,500 yuan/mt in the short term.
[Data source statement: Except for publicly available information, other data are processed by SMM based on public information, market communication, and relying on SMM's internal database model, for reference only and do not constitute decision-making advice.]
