12.17 SMM Cast Aluminum Alloy Morning Comment
Futures: The most-traded cast aluminum alloy 2601 futures contract opened at 21,080 yuan/mt overnight, climbed to a high of 21,170 yuan/mt, fell to a low of 20,630 yuan/mt, and finally closed at 20,925 yuan/mt, down 190 yuan/mt or 0.9% from the previous close. Trading volume was 11,437, a decrease of 10,944 from the previous day, indicating a significant contraction in volume and cooling market trading sentiment, with insufficient buying support during the decline. Open interest was 17,565, down 99 from the previous day, with a further reduction of 61 at the close, showing synchronized declines in volume and open interest as capital participation willingness waned. Resistance above is seen at the previous high of 21,440, while support below is initially at the day's low of 20,630; a break below this level would further test the 20,500 integer mark.
Basis Report: According to SMM data, on December 16, the SMM ADC12 spot price showed a theoretical premium of 720 yuan/mt over the closing price of the most-traded cast aluminum alloy futures contract (AD2602) at 10:15.
Warrant Report: SHFE data showed that on December 16, the total registered warrant volume for cast aluminum alloy was 69,633 mt, a decrease of 89 mt from the previous trading day. By region, the total registered volume in Shanghai was 4,757 mt, unchanged from the previous day; Guangdong's total registered volume was 21,744 mt, down 29 mt; Jiangsu's total registered volume was 12,080 mt, down 60 mt; Zhejiang's total registered volume was 24,324 mt, unchanged; Chongqing's total registered volume was 6,308 mt, unchanged; and Sichuan's total registered volume was 420 mt, unchanged.
Aluminum Scrap: On Tuesday, spot primary aluminum prices continued to decline from the previous trading day, with the SMM A00 spot price closing at 21,630 yuan/mt, and the aluminum scrap market followed with a slight decrease. Baled UBC was quoted in the range of 16,200-16,700 yuan/mt (tax excluded), while shredded aluminum tense scrap (priced based on aluminum content) was quoted in the range of 17,900-18,450 yuan/mt (tax excluded). The price difference between A00 aluminum and shredded aluminum tense scrap closed at 1,901 yuan/mt, and the price difference between A00 aluminum and bare bright aluminum wire in Jiangsu was 882.5 yuan/mt. The aluminum scrap market is expected to hover at highs this week, with the mainstream range for shredded aluminum tense scrap (priced based on aluminum content) projected at 18,100-18,800 yuan/mt (tax excluded). The primary aluminum price trend serves as the core guidance, coupled with the impact of environmental protection-driven production restrictions and transportation constraints in central China, leading to cautious market sentiment. The overall tug-of-war between sellers and buyers continues, requiring close monitoring of primary aluminum fluctuations, environmental protection policies, and downstream procurement pace, while remaining vigilant against the risk of a high-level correction.
Silicon Metal: Spot silicon metal prices were basically stable. Yesterday, SMM oxygen-blown #553 silicon in east China was priced at 9,100-9,300 yuan/mt, and #441 silicon at 9,300-9,500 yuan/mt. Futures prices moved sideways, with the most-traded silicon futures contract closing at 8,365 yuan/mt at the end of the session, up 15 yuan/mt from the previous day. Last week, after futures prices fell sharply, spot-futures price spreads strengthened as spot traders sold smoothly. This week, spot-futures price spreads were largely stable, and silicon enterprises held prices firm with low willingness to sell at low prices. Spot prices remained stagnant and stable.
Overseas market: Current overseas ADC12 offers held steady at $2,620–2,640/mt, with import losses ranging from 200-400 yuan/mt.
Inventory: According to SMM statistics, on December 16, the daily social inventory of secondary aluminum alloy ingots in Foshan, Ningbo, and Wuxi totaled 48,821 mt, down 41 mt from the previous trading day and down 336 mt from last Tuesday (December 9).
Summary: Yesterday, aluminum prices continued to decline, while secondary aluminum market prices showed slight divergence. Some enterprises adjusted quotes down by 100 yuan/mt following market trends, while others chose to hold quotes firm, mainly adopting a wait-and-see stance. Currently, raw material supply is generally tight, and traders' reluctance to sell intensified amid falling prices, with high costs supporting secondary aluminum prices' relative resilience. Sharp fluctuations in aluminum prices exacerbated downstream wait-and-see sentiment, coupled with signs of marginal weakening in demand, resulting in overall sluggish trading. Overall, costs provide a floor for prices, while weakening demand and aluminum price fluctuations suppress purchase willingness. ADC12 prices are expected to hover at highs in the short term.
[Data source statement: Except for public information, other data are processed by SMM based on public information, market communication, and SMM's internal database model, for reference only and not constituting decision-making advice.]
