A00 Aluminum Pulled Back, Aluminum Scrap Adjustments Varied [Daily Aluminum Scrap Review]

SMM, August 18:

SMM A00 spot aluminum ingot prices closed at 23,900 yuan/mt today, down 170 yuan/mt from the previous trading day. Price adjustments in China’s aluminum scrap market varied, with active adjustments in Shanghai, Zhejiang, Jiangsu, and other regions, while Guizhou, Anhui, Central China, and other areas stayed stable and waited on the sidelines. Against the backdrop of continuously rising primary aluminum prices, aluminum scrap saw relatively limited fluctuations, and the price pass-through mechanism was impeded, mainly constrained by two factors: first, downstream demand for secondary aluminum alloy weakened at the margin. With high-temperature holidays overlapping 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 and windows and the like remained high in Henan and other regions, weakening the upside elasticity of aluminum scrap prices. In addition, supply-side constraints from the “reverse invoicing” policy persisted, and the scarcity of compliant aluminum scrap with invoices 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 has gradually widened, and aluminum scrap’s economic advantage versus primary aluminum has partially recovered. 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 weighing on prices.