Southeast Asian Aluminum Scrap Market Remains Stable; UBC Outperforms Other Scrap Grades
The Southeast Asian aluminum scrap market remained largely range-bound this week. In Malaysia, Tense traded around USD 2,750/t, Talon was assessed at MYR 13,950/t (approximately USD 3,410/t), while UBC stood at MYR 10,175/t (approximately USD 2,488/t). In Thailand, Talon was quoted at THB 109,500/t (approximately USD 3,260/t) and UBC at THB 84,000/t (approximately USD 2,500/t).
Market participants reported that, apart from UBC, trading activity across most scrap grades remained limited, with purchases continuing to be driven primarily by immediate production needs. Supported by beverage can recycling demand, UBC trading activity improved slightly, while cable scrap and Tense continued to move within a narrow range amid slow end-user demand.
Although published UBC prices in Malaysia and Thailand remained close, several overseas market participants indicated that high-quality Thai UBC continues to command a premium over Malaysian material in the spot market. According to market feedback, premium-grade Thai UBC is largely secured by major secondary aluminum producers, limiting freely available supply. In contrast, Malaysia's UBC market is supplied mainly by small and medium-sized scrap yards, making transaction prices more dependent on material quality, cargo size, and export destination.
ADC12 Market Remains Under Pressure; Indian Prices Continue to Trade Above Southeast Asia
The Southeast Asian ADC12 market remained weak this week. Malaysia's domestic ADC12 was assessed at MYR 12.55/kg (approximately USD 3,068/t), while FOB prices stood at around USD 3,090/t. Thailand's domestic ADC12 was quoted at THB 103/kg (approximately USD 3,066/t), with FOB prices easing to approximately USD 3,065/t.
Most producers maintained cautious offers, although some mills lowered quotations slightly to secure orders. Market enquiries improved marginally, but new transactions remained limited as downstream buyers continued to purchase only according to production requirements. With scrap prices remaining relatively firm while alloy prices softened further, profit margins for secondary aluminum producers continued to narrow.
In India, OEM-grade ADC12 was quoted at INR 325-345/kg (approximately USD 3,397-3,606/t), while non-OEM material traded at around INR 320-340/kg (approximately USD 3,345-3,555/t). Malaysian ADC12 delivered to Chennai was offered at approximately USD 3,240-3,272/t, maintaining a price advantage over locally produced OEM-grade material. However, market participants noted that Indian purchasing activity slowed during the week, resulting in softer trading volumes compared with previous weeks.
CBAM Implementation Drives Market Focus Toward Low-Carbon Supply Chains
The EU Carbon Border Adjustment Mechanism (CBAM) remained one of the key topics discussed among overseas customers this week. Since entering its definitive phase on 1 January 2026, EU importers have been required to purchase and surrender CBAM certificates based on the embedded emissions of imported products, increasing market attention on carbon costs and supply chain compliance.
Meanwhile, the European Union is advancing proposals to expand CBAM from 2028, potentially extending coverage to more downstream steel and aluminum products while strengthening anti-circumvention measures. For the aluminum industry, particular attention has been paid to discussions surrounding the inclusion of pre-consumer scrap and the possible future expansion of CBAM to additional recycled aluminum products. As these proposals are still under the EU legislative process, the final scope has yet to be confirmed.
As regulatory requirements continue to evolve, European buyers are placing greater emphasis on carbon footprint disclosure, recycled content, supply chain traceability, and third-party emissions verification. Market participants generally believe that producers with robust carbon data management systems and low-carbon production capabilities will enjoy a stronger competitive position in the European market.
Market Outlook
SMM expects the Southeast Asian secondary aluminum market to remain range-bound in the near term. Scrap supply remains relatively stable, with UBC likely to stay firm on tighter availability, while the ADC12 market continues to face pressure from weak downstream demand and limited trading activity.
Going forward, the market will closely monitor LME aluminum prices, policy developments in Europe and the United States, further CBAM revisions, and import demand from China and India, all of which are expected to remain key drivers of regional pricing and trade flows.
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