[SMM Cast Aluminum Alloy Morning Comment: May Auto Market Domestic Demand Under Pressure, Exports Strong; Narrowing Price Difference Between A00 Aluminum and Scrap Tightens Raw Material Supply] The ADC12 market traded steadily on Wednesday, with the SMM ADC12 price remaining flat at 23,900 yuan/mt. This week, cast aluminum alloy futures diverged from SHFE aluminum, with cast aluminum futures steady to firm while SHFE aluminum fell below the 24,000 yuan/mt mark. In the spot market, A00 aluminum prices declined for consecutive sessions, but ADC12 prices remained firm. The spread between the two has returned to positive territory, ending the inversion since April, underscoring the resilience of alloy prices.

According to SMM data, the operating rate of die-casting zinc alloy in May was 40.64%, down 1.58 percentage points month-on-month and 6.46 percentage points year-on-year.

【SMM News】 In May, China's automobile production and sales reached 2.616 million and 2.629 million units respectively, showing month-on-month growth but a slight year-on-year decline, with the decline narrowing further. Overall, in the first five months, total automobile production and sales reached 12.235 million and 12.207 million units respectively. Among these, the production and sales of new energy vehicles (NEVs) reached 5.841 million and 5.802 million units, representing year-on-year growth of 2.5% and 3.5% respectively.

According to SMM data, prices of zinc, aluminum, and copper rose overall starting from the end of last year, and die-casting zinc alloy enterprises continued to face cost pressure. Meanwhile, since March this year, aluminum prices surpassed zinc prices, with the price center steadily running above 23,400 yuan/mt with fluctuations, while copper prices operated above 100,000 yuan/mt for most of the time since entering 2026, intensifying the operational pressure on die-casting zinc alloy producers.

[SMM Analysis]Secondary Aluminum Operating Rate Declined in April, with Downward Pressure Persisting in May

Data released by CAAM showed that in March, China's automobile production and sales reached 2.917 million units and 2.899 million units, down 3% and 0.6% YoY, respectively. Among them, new energy vehicle production and sales reached 1.231 million units and 1.252 million units, down 3.6% and up 1.2% YoY, respectively, while exports were up 1.3 times YoY.

[How Should Zinc Consumption Be Viewed Against the Backdrop of Geopolitical Conflicts?] Q1 2026 had passed, and the overall recovery in post-holiday consumption was somewhat delayed. How would consumption perform going forward?

[SMM Cast Aluminum Alloy Morning Comment: Futures Rebound Lifted Sentiment, Spot Quotes Rose Across the Board] Spot market, boosted by the rebound in futures prices, ADC12 quotes rose across the board today, with the SMM average price of ADC12 raised by 300 yuan/mt. Driven by the cost side, producers actively recouped earlier losses, generally raising prices by 200-400 yuan/mt. However, affected by wild swings in prices during the week, downstream purchase sentiment remained cautious, with most buyers staying on the sidelines and only restocking to meet immediate needs, while the overall pace of market transactions was stable. In the short term, against the backdrop of cost support and a mild release of supply, ADC12 prices were expected to hold up well.

According to data released by CAAM, China's automobile production and sales reached 2.45 million units and 2.346 million units, respectively, in January this year. Compared with the same period last year, production increased slightly by 0.01% YoY, while sales decreased by 3.2% YoY. In the segmented market, NEVs performed remarkably, with production and sales reaching 1.041 million units and 945,000 units, respectively, up 2.5% YoY and 0.1% YoY. In addition, NEV exports continued their strong growth momentum, with exports reaching 302,000 units, doubling YoY.

[SMM Cast Aluminum Alloy Morning Comment: Overnight Futures Slightly Lower, Spot Prices Hold Steady Amid Wait-and-See Attitude] On Wednesday, the A00 aluminum price edged down by 30 yuan/mt to 23,260 yuan/mt compared with the previous trading day, while the SMM ADC12 price remained stable at 23,650 yuan/mt. As the Chinese New Year approaches, upstream and downstream enterprises in the secondary aluminum industry chain have entered a concentrated holiday period, leading to a noticeable decline in market liquidity. Actual transactions continue to be sluggish, with spot quotations largely making minor adjustments around the futures market.