The Shanghai Futures Exchange (SHFE) cast aluminum market showed a strong performance today. The main contract for cast aluminum (2607) opened higher and jumped, maintaining a firm trend throughout the session. By the close at 15:00, the main cast aluminum contract settled at 23,120 yuan per ton, an increase of 230 yuan, representing a gain of 1.00%. The trading volume for the day was 5,838 lots, a decrease of 2,630 lots, while open interest rose by 227 lots to 14,721 lots.
According to spot market data for May 19th, the prices for various cast aluminum alloys were as follows: The ADC12 alloy was quoted at 23,300-23,500 yuan per ton, with an average price of 23,400 yuan per ton, unchanged from the previous day. The A356.2 cast aluminum ingot was quoted at 24,550-24,950 yuan per ton, with an average price of 24,750 yuan per ton, up by 150 yuan. The A380 cast aluminum ingot was quoted at 25,400-25,600 yuan per ton, with an average price of 25,500 yuan per ton, unchanged. The ZL102 cast aluminum ingot was quoted at 24,450-24,650 yuan per ton, with an average price of 24,550 yuan per ton, up by 150 yuan. The ZLD104 cast aluminum ingot was quoted at 24,450-24,650 yuan per ton, with an average price of 24,550 yuan per ton, also up by 150 yuan.
Market analysis for cast aluminum alloys indicates a complex interplay of factors. On the macro front, persistently rising U.S. Treasury yields have reinforced expectations of a hawkish stance from the Federal Reserve, keeping the U.S. dollar index in a high-range oscillation pattern. This has somewhat limited the upside potential for aluminum prices. However, strong bullish sentiment from leading institutions and concerns over global aluminum supply disruptions due to geopolitical tensions in the Middle East have heightened market worries about structural shortages, providing solid support for aluminum prices. Cast aluminum prices are closely linked to primary aluminum, allowing them to follow the latter's strong rebound.
Fundamentally, on the cost side, scrap aluminum prices remain firm at elevated levels due to a combination of tighter tax policies and constrained scrap supply. This has established a solid cost floor for cast aluminum alloys. On the demand side, as the industry enters its traditional off-season, operating rates at downstream die-casting enterprises remain low. There has been no substantial improvement in end-user orders from sectors like automotive and communications, leading to increased market expectations of weakening future demand. Spot market trading sentiment is subdued. While holders maintain firm offers, their willingness to sell is moderate. Downstream die-casting plants are primarily purchasing based on immediate needs, resulting in overall purchasing activity that is not particularly robust.
In summary, with cost factors and demand-side pressures in contention, cast aluminum alloy prices are likely to find it easier to rise than fall in the near term. However, the upside also lacks strong momentum. Prices are expected to continue consolidating at high levels. Market participants should closely monitor the recovery of downstream operating rates and any marginal changes in the scrap aluminum supply situation.
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