This week, China’s domestic aluminum scrap market largely resumed normal production and shipment. However, affected by the US–Iran geopolitical conflict, prices moved in tandem with primary aluminum and posted strong gains. As of March 5, 2026, the SMM A00 aluminum price closed at 25,120 yuan/mt, up a cumulative 1,710 yuan/mt over the week. Mainstream aluminum scrap categories were raised in tandem: baled UBC closed at 18,100-18,600 yuan/mt (excl. tax), and shredded aluminum tense scrap (water price) closed at 20,500-21,050 yuan/mt (excl. tax). In terms of the price difference between primary metal and scrap, on March 5, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was 3,688 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap was 2,881 yuan/mt. Supply side, after the Lantern Festival, domestic aluminum scrap yards basically resumed a normal pace of shipments, but amid rising raw material costs and tighter enforcement of the reverse invoicing policy, compliant supply was tight, triggering a scramble in the market. Demand side, downstream scrap utilization enterprises saw post-holiday order recovery and operating rates fall short of expectations, with a weaker willingness to restock significantly; demand remained mainly rigid, and only a small number of traders engaged in stockpiling and holding back sales, waiting for further price increases, while the supply-demand pattern of weakness on both sides persisted. The aluminum scrap market is expected to hold up well at elevated levels next week, with the mainstream range for shredded aluminum tense scrap (water price) running around 20,300-20,900 yuan/mt (excl. tax). Post-holiday production order gradually recovered, and supply release will further ease, but downstream processing enterprises saw slow order recovery; overall transactions are expected to remain sluggish, and the tug-of-war between sellers and buyers is likely to intensify in the short term. Close attention should be paid to the impact of the US–Iran conflict on primary aluminum supply and transportation, downstream resumption progress, and changes in recycling policies, and vigilance is warranted against heightened price fluctuation risks.
This week, the secondary aluminum alloy market held up well amid a fluctuating trend, with the price center moving up notably. As of Friday, SMM ADC12 was quoted at 24,800 yuan/mt, up 1,000 yuan/mt from last Friday. Cost side, supported by stronger aluminum prices, raw material prices rose across the board, pushing up production costs for secondary aluminum enterprises. Producers generally showed stronger willingness to quote, and market quotations moved higher accordingly. Demand side, downstream enterprises gradually resumed operations after the holiday, but actual orders in sectors such as automobiles underperformed expectations. Against the backdrop of continued price increases, downstream purchasing turned more cautious, mainly restocking via small, rigid-demand orders. Overall transaction volumes increased only limitedly, and demand provided insufficient support for further price gains. In terms of supply, this week the operating rate of leading secondary aluminum enterprises rebounded 3.1 percentage points QoQ to 56.3%, and market supply increased gradually, though overall it remained in a recovery phase; in the short term, the pace of supply release was relatively mild. Social inventory of aluminum alloy ingots continued the destocking trend, with destocking speed accelerating. As of March 5, SMM data showed social inventory fell by 4,500 mt from last Thursday to 41,000 mt, mainly due to low arrivals after the holiday and downstream restocking as operations resumed. Meanwhile, rising aluminum prices boosted traders’ willingness to make shipments, and some producers, to ensure deliveries, shifted to purchasing spot cargo from traders, further accelerating inventory drawdowns. On the import side, driven by a sharp rise in LME aluminum prices and stronger overseas demand, overseas ADC12 quotations climbed to around $3,200/mt, while domestic price gains were relatively limited, and the import window quickly turned loss-making. Overall, from a macro perspective, tensions in the Middle East triggered market concerns over the stability of aluminum supply, and aluminum prices at home and abroad held up well. In the short term, with cost support and mild supply release, ADC12 prices are expected to maintain a hold-up-well fluctuating trend. The medium-term trend will still depend on the recovery of end-use consumption. If die-casting industry orders expand significantly, the price center is expected to move further up; if demand recovery falls short of expectations, together with a continued rise in operating rates on the supply side, prices will shift into rangebound consolidation at elevated levels.
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