In August, China’s secondary aluminum alloy ADC12 prices generally followed a pattern of strengthening initially, weakening in mid-month, and stabilizing before rebounding toward month-end. Prices remained relatively firm at the beginning of the month, but gradually came under pressure as demand weakened during the traditional seasonal lull. Toward the end of August, however, stronger aluminum prices and improving market sentiment helped ADC12 prices regain upward momentum. As of September 4, SMM assessed ADC12 prices at RMB 24,300/mt, up RMB 200/mt from the beginning of August.
On the cost side, ADC12 production costs edged higher in August, providing solid support for prices. According to SMM data, the theoretical total cost of ADC12 production rose 0.2% month on month to RMB 23,577/mt in August 2026, with costs of major raw materials all increasing slightly. Scrap aluminum remained the dominant component, with the cost rising to RMB 21,286/mt, accounting for 90.4% of the total. Copper costs increased by RMB 31/mt to RMB 902/mt, representing around 3.8% of total costs, while silicon costs edged up by RMB 7/mt to RMB 487/mt, accounting for approximately 2.1%.
On the demand side, the traditional seasonal slowdown remained evident in August, while the strength of the September peak season will be a key market focus. End-user orders showed limited improvement in August, while downstream buyers mainly purchased on a need-based basis and remained relatively cautious toward higher-priced material. As a result, demand provided only limited support for the rise in ADC12 prices. However, inquiries and purchasing activity improved somewhat in late August compared with the middle of the month as the impact of the summer slowdown gradually eased.
In September, as the traditional peak season, or “Golden September,” gets underway, the impact of the summer slowdown is expected to diminish further. Production and orders in major downstream sectors such as automobiles and motorcycles are likely to recover, supporting a month-on-month improvement in ADC12 demand and greater purchasing interest compared with August. Nevertheless, the strength of the recovery in end-user orders has yet to be fully confirmed, and the pace and magnitude of the seasonal demand improvement will remain important factors to watch.
On the supply side, industry operating rates edged higher in August but remained below year-ago levels. The operating rate of China’s secondary aluminum alloy industry stood at 47.4% in August, up 0.7 percentage point month on month but still down 6.0 percentage points year on year. Production increased slightly, but the recovery remained limited. Some producers saw modest improvements in orders and raw material availability. In addition, stronger futures prices early in the month encouraged purchases by futures-spot traders, while some producers used deliveries against futures positions to relieve finished-goods inventory pressure, allowing part of their capacity to resume.
In September, the end of summer holidays at downstream plants and the gradual start of the traditional peak season are expected to improve producers’ order visibility and encourage higher production schedules. Industry operating rates therefore have room for further recovery. However, given that peak-season orders have so far been released only gradually, combined with tighter tax supervision in some regions, difficulties in sourcing compliant scrap, and the potential impact of the Mid-Autumn Festival holiday on production and purchasing schedules, operating rates are expected to recover only moderately and are likely to remain below year-ago levels. Market attention will focus on downstream order recovery, changes in tax and invoice policies, and raw material availability.
Looking ahead to September, ADC12 prices are expected to remain in a relatively strong range, with room for the price center to move higher. However, the pace and sustainability of the potential increase will depend largely on whether peak-season demand is effectively realized. On the cost side, continued strength in aluminum prices, elevated scrap aluminum prices and tight supplies of compliant raw materials should keep production costs well supported. Meanwhile, the closed import window continues to limit the availability of lower-cost overseas material, leaving relatively limited downside room for ADC12 prices.
Demand will be the key factor determining whether ADC12 prices can break above previous highs in September. If orders from major downstream sectors such as automobiles and motorcycles continue to improve and spot transactions gradually increase, ADC12 prices could gain further upward momentum on top of firm cost support. Conversely, if the seasonal demand recovery falls short of expectations, the gradual recovery in operating rates and continued inventory accumulation could limit the upside for spot prices, keeping the market in a high-level range-bound pattern.
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