Investment Rating - The report maintains a positive outlook on the aluminum recycling industry, driven by resource supply security and dual carbon goals, indicating a favorable investment environment for recycled aluminum [1]. Core Insights - The recycled aluminum industry is becoming a significant growth area in China's aluminum supply, with an expected production of approximately 10.5 million tons in 2024, accounting for about 19% of total aluminum supply. The target is to exceed 15 million tons by 2027, reflecting a CAGR of 13% from 2024 to 2027 [2][11]. - The demand for resource supply security is increasing, with recycled aluminum seen as a key solution to reduce reliance on imported bauxite, which had a dependency rate of over 77.6% in the first eight months of 2025. The domestic supply of recycled aluminum is primarily sourced from social waste aluminum, which is expected to exceed 80% in 2024 [2][4]. - The dual carbon constraints and the establishment of a carbon market are accelerating the visibility of the green premium associated with recycled aluminum. The carbon emissions from producing one ton of electrolytic aluminum are approximately 11.2 tons, while recycled aluminum only emits 0.23 tons, making it a significantly lower carbon option [2][4]. - The potential of urban mining is substantial, with accelerated development of recycling systems. Policies are being implemented to support small recycling enterprises, and a national recycling platform is being established to enhance the recycling infrastructure [2][5]. Summary by Sections 1. Recycled Aluminum as a Key Supply Source - Recycled aluminum, derived from waste aluminum through melting and refining, is a crucial component of the aluminum supply chain, with a short industrial chain and high recovery value [2][11]. - The industry is expected to grow significantly, with a target of 15 million tons by 2027, supported by government policies promoting high-quality development in the aluminum sector [2][11]. 2. Resource Supply Security and Dual Carbon Goals - The increasing demand for resource supply security positions recycled aluminum as a critical strategy to mitigate reliance on foreign bauxite, especially as domestic bauxite reserves are limited [2][4]. - The green value of recycled aluminum is becoming more apparent, with the anticipated tightening of carbon quotas in the national carbon market expected to drive up carbon prices and enhance the green premium for recycled products [2][4]. 3. Urban Mining Potential and Recycling System Development - The recycling system is being rapidly developed, with policies favoring small recycling enterprises and the establishment of a national recycling platform to improve the efficiency of aluminum recovery [2][5]. - The peak of automobile scrappage is expected to occur around 2026, which will significantly increase the supply of waste aluminum, alleviating raw material bottlenecks [2][5]. 4. Investment Recommendations - The report suggests focusing on companies with high raw material security, advanced recycling technologies, and the ability to produce high-premium products, such as Ming Tai Aluminum, Shunbo Alloy, Yiqiu Resources, Lizhong Group, and Yongmaotai [2][3].

Group 1 - The launch of casting aluminum alloy futures on June 10 has seen all contracts rise, with the main contract reaching a high of 19,500 yuan and a low of 19,070 yuan, marking an increase of 4.63% [1] - Current market conditions indicate a strong upward trend for casting aluminum alloy, despite being in a traditional off-season for consumption [1] - Institutions suggest that the price difference between ADC12 and A00 is currently around -800 yuan, with historical mid-year lows typically between -1,000 to -1,500 yuan [1] Group 2 - The current spot price for ADC12 is approximately between 19,500 to 20,000 yuan per ton, with production costs at 20,086 yuan per ton, indicating a potential buying opportunity at lower prices [2] - Concerns about severe overcapacity in casting aluminum alloy production and the traditional off-season from June to August suggest a downward trend in the medium to long term [2] - The expected reasonable trading range for AD2511 is projected to be between 18,000 to 19,700 yuan per ton [2]

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - Shanghai Futures Exchange plans to launch cast aluminum alloy futures and options on June 10, 2025, which will bring new development opportunities to the aluminum alloy industry. The report aims to help investors understand the aluminum alloy industry chain and potential trading strategies by writing a series of aluminum alloy special topics [7]. 3. Summary According to the Table of Contents 3.1 Aluminum Alloy Definition and Classification - Aluminum alloy is an alloy with aluminum as the base and a certain amount of other alloying elements added. It has properties such as low density, high strength, good casting and plastic processing performance, and is widely used in various fields. It can be divided into wrought aluminum alloy and cast aluminum alloy according to composition and processing method [8]. - **Wrought Aluminum Alloy**: It is made into semi - finished products such as tubes, rods, wires, and profiles through various pressure processing methods. It can be further divided into five categories: anti - corrosion aluminum alloy, duralumin, super - duralumin, forged aluminum, and special aluminum, each with different properties and uses [9]. - **Cast Aluminum Alloy**: It is used to directly cast various mechanical parts. According to the main added elements, it can be divided into aluminum - silicon alloy, aluminum - copper alloy, aluminum - magnesium alloy, aluminum - zinc alloy, and aluminum - rare earth alloy. Different types have different characteristics and applications, such as in the marine industry [14]. - Aluminum alloy can also be classified according to use, production material source, and alloying element type and quantity, with each classification having specific characteristics and common models [20][21][23]. 3.2 Definition and Properties of Aluminum - Silicon - Copper Alloy ADC12 - ADC12 is a Japanese brand, equivalent to A383 in the US and YL113 in China, belonging to the Al - Si - Cu series alloy. It is a representative brand of recycled cast aluminum alloy, accounting for about 75% of China's recycled cast aluminum alloy production in 2023 [34][36]. - Its main properties include a melting point of 580°C, a boiling point of 2519°C, a density of 2.74g/cm³, good fluidity, light weight, good thermal conductivity, corrosion resistance, and mechanical workability, making it suitable for die - casting and various applications [39]. 3.3 Production Process of Cast Aluminum Alloy ADC12 - The production of recycled aluminum mainly includes pre - treatment of waste aluminum, melting, refining, and casting. The production process of ADC12 mainly includes pressure casting and gravity casting [41][50]. - **Pressure Casting**: It is divided into high - pressure casting and low - pressure casting. High - pressure casting can produce parts with high density and good surface quality, but has high requirements for molds. Low - pressure casting can reduce the formation of pores and inclusions, with better dimensional stability and surface quality [44]. - **Gravity Casting**: It uses gravity to inject molten metal into a permanent mold, which can produce parts with complex shapes and smooth surfaces. It has strong versatility and flexibility in the manufacturing of precision parts [48]. - With the improvement of environmental protection requirements and technological progress, the production process of recycled aluminum has undergone significant changes in pre - treatment, melting, refining, casting, and other aspects [54]. 3.4 Production Cost of Cast Aluminum Alloy ADC12 - Cast aluminum alloy accounts for about 60% of all aluminum alloys, and ADC12 is mainly composed of aluminum from waste aluminum and primary aluminum. The cost of recycled cast aluminum alloy mainly includes aluminum element cost, alloy element cost, energy cost, and other costs [56]. - **Aluminum Element Cost**: Usually, a mixture of primary aluminum and recycled aluminum is used, with a consumption of about 1.1 tons of waste aluminum to produce one ton of ADC12 due to a 90% water - output rate of waste aluminum melting [58][59]. - **Alloy Element Cost**: Additional silicon (about 5%) and copper (about 1.2%) need to be added. Other alloy elements have a relatively low proportion [60]. - **Energy Cost**: Mainly natural gas, with 60 - 80 cubic meters of natural gas required to produce one ton of aluminum alloy, and electricity is also consumed. The overall energy cost accounts for about 1% [62]. - According to Steel Union's calculation, in April 2025, the weighted average full cost of ADC12 was 19,817 yuan/ton, with a theoretical profit of 209 yuan/ton [63]. 3.5 Application Fields of Cast Aluminum Alloy ADC12 - ADC12 is widely used in transportation, mechanical manufacturing, architectural decoration, and other fields due to its excellent casting performance, mechanical properties, and lightweight characteristics [64]. - **Transportation Field**: It plays a key role in the lightweight process of the automotive industry, accounting for more than 70% of the total aluminum used in automobiles. It is also widely used in motorcycles and electric vehicles [65][66]. - **Architectural Decoration Field**: Aluminum alloy has many advantages in the construction industry, such as light weight, easy extrusion, corrosion resistance, and high recycling value, making it an ideal green building material [67]. - **Mechanical Manufacturing Field**: Recycled aluminum alloy can reduce production costs and is widely used in automotive parts, machinery equipment shells, mold manufacturing, and precision tools, promoting the green development of the industry [68]. 3.6 Spot Pricing Model of Cast Aluminum Alloy ADC12 - The spot price of aluminum alloy is mainly affected by market supply and demand and futures market prices. Currently, the pricing is mainly based on the spot market because the aluminum alloy futures market is not yet mature [72]. - **Pricing Based on Market Supply - and - Demand Relationship**: The price of ADC12 fluctuates with market supply and demand. Production cost, inventory level, environmental protection policies, and other factors affect market supply and demand [73]. - **Pricing Based on Spot Market Price**: The base price can be divided into spot price and futures price. The spot price mainly refers to quotes from Shanghai Non - ferrous Metals Network and Changjiang Market. The futures price can refer to contracts from London Metal Exchange, New York Mercantile Exchange, and Shanghai Futures Exchange [79][80]. 3.7 Relevant Policies of China's Recycled Aluminum Industry - Since 2006, the Chinese government has introduced a series of policies to support and regulate the recycled aluminum industry, covering waste aluminum recycling, recycled aluminum production, and import - export [81]. - **Waste Aluminum Recycling Policies**: Focus on efficient resource recycling and environmental protection, promoting the standardization, greening, and technological progress of the waste aluminum recycling industry through economic incentives and regulations [81]. - **Recycled Aluminum Production Policies**: Encourage resource recycling and utilization, promote the transformation and upgrading of the industry, and reduce dependence on primary aluminum [84]. - **Recycled Aluminum and Waste Aluminum Import - Export Policies**: Aims to promote the standardized recycling and reuse of waste aluminum resources, optimize the import - export structure, and achieve the green and low - carbon transformation of the industry [85]. 3.8 Cast Aluminum Alloy Futures and Option Contracts - **Listing Time**: Cast aluminum alloy futures will be listed for trading on June 10, 2025 [88]. - **Trading Time**: From Monday to Friday, 09:00 - 10:15, 10:30 - 11:30, 13:30 - 15:00, and 21:00 - 01:00 (continuous trading), with exceptions on the day before legal holidays [89]. - **Listed Contracts**: AD2511, AD2512, AD2601, AD2602, AD2603, AD2604, AD2605 [90]. - **Other Terms**: Include trading margin, price limit, position disclosure, trading commission, and declaration fee charging rules, as well as detailed regulations on delivery units, quality requirements, recognized production enterprises and registered brands, and delivery warehouses [92][93][94]. - The option contract also has specific terms such as contract subject matter, type, trading unit, price limit, and exercise method [105].