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![Supply-demand imbalance The magnesium market was in the doldrums today [SMM Magnesium Morning Meeting Minutes]](https://static.metal.com/price.metal.com/3.1.17/image/news-default.png)
[SMM Magnesium Morning Meeting Minutes: Supply-Demand Imbalance, Magnesium Market Was in the Doldrums Today] Last week, magnesium production rose to a high level, and magnesium alloy demand struggled to reverse the current supply-demand imbalance in the primary magnesium market, which is characterized by strong supply and weak demand. The magnesium market was expected to remain under pressure.
According to SMM, the comprehensive operating rate of the enamelled wire industry in November was 67.91%, up 3.44 percentage points MoM, but down 1.33 percentage points YoY. Among them, the operating rate of large enterprises was 68.38%, that of medium-sized enterprises was 66.05%, and that of small enterprises was 69.29%.
[SMM Aluminum Morning Meeting Minutes: Policy Support Coupled with Transportation Disruptions Bolsters the Bottom Line, While High Prices Suppress Demand, Warranting Caution Against Pullback Risks] Overall, the macro front currently exhibits a strong positive sentiment, with rising copper prices driving aluminum prices higher. On the fundamentals side, this year's Chinese New Year break falls relatively late, leading to a limited weakening in aluminum demand in December. The release of production from new aluminum capacity still requires some time, resulting in limited production growth in December. Additionally, aluminum ingot transportation in Xinjiang is expected to face certain seasonal obstacles, and aluminum ingot inventory performance is projected to be relatively favorable, providing some fundamental support for the rise in aluminum prices. However, excessively high aluminum prices are likely to strongly suppress end-use consumption, necessitating vigilance against the risk of a pullback in aluminum prices at elevated levels.
[SMM Cast Aluminum Alloy Morning Comment: Downstream Casting Operations Shrink, Alloy Prices Adjust with Primary Aluminum] Spot side, Friday's SMM A00 aluminum spot price rose again by 70 yuan/mt to 22,090 yuan/mt, hitting a new year-to-date high, while ADC12 price held steady at 21,700 yuan/mt, with the inverted spread between the two further widening. Cost side, today aluminum scrap prices partially increased following aluminum prices, and copper prices continued rising, reaching a new high of 91,585 yuan/mt, leading to sustained raw material cost increases. The cost shares of aluminum scrap and copper auxiliary materials continued to rise, with cost remaining the main driver for ADC12 price increases. Demand side, aluminum prices hitting year-to-date peaks suppressed short-term procurement pace among downstream buyers. Some die-casting enterprises saw profits shrink due to cost pressure, and some fell into losses, leading to lower operating rates. However, year-end push for annual targets from end-users still supported industry resilience. Overall, ADC12 prices are expected to continue fluctuating at highs in the short term. In terms of weekly spot-futures price spread, the first three days saw futures prices trending upward, but spot prices remained relatively stable, resulting in a widening futures discount. Subsequently, cast aluminum alloy futures came under pressure and diverged significantly from SHFE aluminum—SHFE aluminum surged strongly to a high of 22,350 yuan/mt, driving rapid increases in aluminum scrap prices. Combined with rising copper prices, production costs rose substantially. Against this backdrop, spot ADC12 prices followed up quickly, and the spot-futures price spread narrowed significantly.
[SMM Lead Morning Brief: Lead Prices Lack Upward Momentum, May Maintain High-Level Consolidation] SMM Dec 8: Last Friday, LME lead opened at $2,015/mt, and during the Asian session, it continued to hover at highs...
