China's Secondary Aluminum Alloy Ingot Inventory Drops by 539 MT Amid Regional Destocking

[SMM Aluminum Alloy Daily Review] Today, ADC12 market quotations were mostly stable and wait-and-see, with only a few enterprises tentatively raising prices by 100 yuan/mt. Against the backdrop of limited demand support, although the cost side provided some floor to prices, spot upward momentum remained insufficient, and enterprises generally held a cautious attitude toward price adjustments. In the short term, the ADC12 spot market is expected to continue moving sideways, with the price center unlikely to decline significantly due to cost support. However, before a substantial improvement in end-use demand, upside room for spot prices is likely to remain constrained.

The overseas secondary aluminum market shifted from supply-driven gains to demand-led corrections in H1 as geopolitical risks eased and downstream demand remained weak. At the same time, the UAE, the EU and the US introduced measures to strengthen domestic scrap resource management, reinforcing aluminum scrap's strategic role in global supply chains. In H2, SMM expects demand recovery to be the key driver of prices, while policy will continue to shape trade flows and premium scrap availability.

[Geopolitical Conflicts and Inventory Destocking Drive SHFE and LME Aluminum to Drift Higher in the Near Term] Overall, Middle East geopolitical conflicts push up risk premiums, combined with the ongoing destocking of China’s aluminum ingot inventory, supporting aluminum prices to hold up well. However, the continuous addition of aluminum capacity outside China and the strong dollar policy pursued by the US will continue to suppress the upside room for aluminum prices, where significant pressure is evident.