SMM, August 17:
Today, SMM A00 spot aluminum prices closed at 24,070 yuan/mt, up 200 yuan/mt from the previous trading day, and aluminum scrap prices in China followed suit. Against the backdrop of continuously rising primary aluminum prices, aluminum scrap saw relatively limited fluctuations, with the price transmission mechanism impeded, mainly constrained by two factors: first, downstream demand for secondary aluminum alloy weakened at the margin. With high-temperature holidays overlapping with the traditional consumption off-season, the operating rate of cast aluminum alloy enterprises continued to decline, and order volumes shrank; second, inventories of wrought aluminum alloy scrap raw materials for doors, windows, and the like in Henan and other regions remained high, weakening the upside elasticity of aluminum scrap prices. In addition, supply-side constraints from the “reverse invoicing” policy persisted, and the scarcity of compliant, invoiced aluminum scrap provided bottom support for aluminum scrap prices. As the high-temperature holiday had not yet ended, downstream cast aluminum alloy enterprises kept operating rates at low levels, and order recovery still needed time. Scrap utilization enterprises were likely to continue purchasing as needed and maintaining low inventories, and a concentrated restocking rally still had to wait. Notably, the price difference between A00 aluminum and shredded aluminum tense scrap had gradually widened, and the economic advantage of aluminum scrap relative to primary aluminum recovered somewhat. It was expected that in the short term, the aluminum scrap market would continue to move sideways at elevated levels, with weak end-use demand remaining the core factor suppressing prices.
