A00 prices rebounded today, bringing the issue of primary aluminum substitution back to the discussion table [Aluminum Scrap Daily Review]

SMM, October 12:

Today, SMM A00 aluminum prices closed at 23,810 yuan/mt, up 160 yuan/mt from the previous trading day. Price performance diverged across aluminum scrap categories. Baled UBC prices remained unchanged today, while aluminum tense scrap prices were raised by 100 yuan/mt. In terms of price spreads, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan stood at approximately 2,492 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap stood at approximately 1,160 yuan/mt. After the National Day holiday, the aluminum scrap market continued to hold up well. Supply side, aluminum scrap yards have all resumed operations after the brief holiday, with scrap release increasing somewhat. However, recycling policies still constrain liquidity, with widespread limitations on invoicing quotas. The tight invoice supply pattern is unlikely to ease in the short term, and tight supply will continue to support prices. Demand side, as the traditional peak consumption season for cast aluminum alloy gradually kicks off, enterprises have accelerated their order-taking and procurement pace. Under the dual tightness of supply and demand, price support for aluminum tense scrap is expected to strengthen further. Demand for wrought aluminum alloy remains moderate, and in-factory inventory is relatively ample. However, with tax inspections limiting supply, aluminum scrap supply is expected to decline, gradually opening a channel for price increases.