A00 rose by another 100 yuan/mt today, competition for compliant supply intensifies [Aluminum Scrap Daily Review]

SMM, October 22:

Today, SMM A00 aluminum prices closed at 23,710 yuan/mt, up 100 yuan/mt WoW from the previous trading day. Aluminum scrap prices generally followed with a 50 yuan/mt increase, though some regions held off on price adjustments. As of October 22, SMM A00 aluminum prices closed at 23,710 yuan/mt, rebounding 450 yuan/mt from last Thursday. In terms of price spreads, on October 22, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was about 2,142 yuan/mt, narrowing 12 yuan/mt WoW from last Thursday; the price difference between A00 aluminum and shredded aluminum tense scrap was about 532 yuan/mt, narrowing 179 yuan/mt WoW. On the supply side, tax inspections in central China continued to deepen, increasing the scarcity of compliant invoiced aluminum scrap, and enterprises holding invoices showed strong willingness to hold prices firm. Competition among enterprises remained intense, and actual effective supply stayed tight. On the import side, this week, imported shredded aluminum prices at Ningbo Port and Tianjin Port were recorded at 20,970 yuan/mt (tax inclusive) and 21,020 yuan/mt (tax inclusive), respectively, flat WoW. According to customs data, aluminum scrap imports in September were 158,800 mt, up 12% MoM, continuing the recovery trend. On one hand, shipping schedules and deliveries have gradually returned to normal, with Southeast Asian supply replenishment continuing to increase. On the other hand, the deepening peak season has to some extent driven phased restocking demand for imported scrap. In the short term, the aluminum scrap market is expected to hold up well, with limited downside. On the supply side, the scope and intensity of tax inspections remain the core variable, and the tight supply of compliant invoiced material is unlikely to ease. Some industry leaders have raised their invoice tax rates further, intensifying competition for compliant supply among enterprises. On the demand side, downstream scrap utilization enterprises still show resilient demand, but finished product inventory pressure is also dampening raw material purchasing enthusiasm. Additionally, the price difference between A00 aluminum and aluminum scrap has recently narrowed to historical lows, weakening the cost advantage of aluminum scrap, and the issue of primary aluminum substitution is back on the table. Going forward, close attention should be paid to the spread of tax inspections, changes in invoicing quotas across regions, and downstream operating pace.