Aluminium Scrap Prices May Also Be Subject To Downward Pressure

SHANGHAI, Jul 4 (SMM) – Last week (June 26-30), SMM A00 spot aluminium prices fell to 18,470 yuan/mt on Monday, before undergoing minor adjustments. By Friday, prices had fallen by 290 yuan/mt, 1.54% down from the previous week. The average weekly price of A00 spot aluminium was pushed down to 18,526 yuan/mt, a decrease of 294 yuan/mt. Aluminium  scrap prices saw a significant drop of 200-300 yuan/mt, stabilising after a slight rebound. Overall, the price of aluminium extrusion scrap declined by 100-250 yuan/mt, while aluminium tense scrap dropped by 0-100 yuan/mt. The price difference between primary aluminium and aluminium scrap remained stable, with a slight widening. Last week, overall supply shrank. In response to declining prices, upstream suppliers quickly reduced their output at the start of the week. However, as weak market outlook became clearer, supply steadied, with most companies ensuring product delivery. Downstream companies, faced with fewer orders and high raw material costs, curtailed profits, prompting cautious buying. The Dragon Boat Festival did not stimulate post-holiday inventory restocking due to price fluctuations and soft consumption, resulting in a languid market with pronounced supply-demand weakness. Looking forward, aluminium prices face downward pressure due to the resumption of operations in Yunnan and weak consumption. A steep drop in aluminium prices is unlikely, owing to low stocks and high costs. The support for aluminium scrap prices appears slightly inadequate, and aluminium scrap prices may also be subject to downward pressure.