Primary Aluminum Down Again; Aluminum Scrap Catches Up with the Decline [Aluminum Scrap Daily Review]

SMM August 19:

Today, the SMM A00 spot aluminum price closed at 23,670 yuan/mt, down another 230 yuan/mt from the previous trading day. China’s aluminum scrap market prices followed the decline overall, with some regions that were on the sidelines yesterday catching up with the decline today. Against the backdrop of continuously climbing primary aluminum prices, aluminum scrap fluctuations were relatively limited, and the price transmission mechanism was hindered. But recently, as primary aluminum has pulled back, the downside resistance of aluminum scrap has provided an opportunity for the narrowing of the price difference between A00 aluminum and aluminum scrap. Additionally, on the supply side, the constraints of the reverse invoicing policy continue, and the scarcity of compliant invoiced aluminum scrap provides bottom support for aluminum scrap prices. Currently, the high-temperature holiday has not yet ended, the operating rate of downstream cast aluminum alloy enterprises remains low, and order recovery still needs time. Scrap utilization enterprises are likely to continue to purchase as needed and adopt a low-inventory strategy, while concentrated restocking remains pending. It is worth noting that currently, the price difference between A00 aluminum and shredded aluminum tense scrap has gradually widened, and the economic advantage of aluminum scrap over primary aluminum has recovered to some extent. It is expected that the short-term aluminum scrap market will continue to move sideways at high levels, with weak end-use demand remaining the core factor suppressing prices.