Aluminum scrap: The aluminum scrap market overall fluctuated at highs this week, tracking primary aluminum price fluctuations. As of June 4, the SMM A00 spot aluminum price closed at 24,120 yuan/mt, down 20 yuan/mt WoW. On the price difference between primary metal and scrap, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was recorded at 2,523 yuan/mt on June 4, while the price difference between A00 aluminum and shredded aluminum tense scrap was 2,093 yuan/mt. The mainstream operating range for shredded aluminum tense scrap liquid aluminum prices (tax-exclusive) was 20,300-20,700 yuan/mt. The operating range for imported shredded aluminum clips (Ningbo Port) was raised by 300 yuan/mt this week to 22,270-22,570 yuan/mt (tax-inclusive). Supply side, regulatory enforcement of the "reverse invoicing" policy continued to tighten. Tax rebate cancellations and intensified tax audits in some provinces drove up invoiced raw material costs, and some enterprises in Anhui, Jiangxi and other regions have already seen production cuts or suspensions. Warehouse inflows at aluminum scrap distribution hubs declined YoY, and aluminum tense scrap inventory decreased due to reduced inflows. Currently, compliance costs in the raw material recycling segment remain elevated, available invoiced supply remains tight, and invoice scarcity has become the core price support. Meanwhile, amid disruptions from the US-Iran conflict, the price spread between domestic and overseas markets has inverted, making imported low-cost quality supply scarce and weakening supplementation to the domestic market. Demand side, off-season effects emerged, with downstream scrap utilization enterprises operating at low rates, sluggish end-user order follow-through, and enterprises maintaining strategies of purchasing as needed with low inventory, creating a cautious procurement atmosphere. Aluminum scrap market prices are expected to continue fluctuating at highs and hold up well. The persistent tightness in compliant invoiced supply provides a floor for aluminum scrap prices. The lagging contraction effect of imported aluminum scrap has not been fully released, with subsequent port arrivals set to remain at low levels, and import supplementation remains limited as the overseas market outperforms the domestic market. At the same time, as the off-season deepens, the sustainability of orders for downstream scrap utilization enterprises is concerning. Scrap utilization enterprises maintain strategies of purchasing as needed with low inventory, and the procurement atmosphere is unlikely to see significant improvement. Currently, invoicing risks in the industry remain elevated, supply-side contraction expectations are strengthening, while weak downstream demand exerts downward pressure, presenting an overall pattern of weakness in both supply and demand.
Secondary aluminum alloy: The price center of ADC12 moved up this week. As of Thursday, the SMM ADC12 price rose 200 yuan/mt WoW to 23,900 yuan/mt. Cost side, cost pressure in the secondary aluminum industry continued to intensify this week. Scrutiny over "invoice-based tax compliance" remained stringent and expanded in scope, with input VAT invoices in persistent short supply, pushing up enterprises' tax burdens and compliance costs while directly constraining normal production. Demand side, downstream consumption weakened further after June, with die-casting enterprises maintaining just-in-time procurement. After ADC12 prices were raised consecutively at the beginning of the week, downstream buyers became cautious in purchasing, lacking momentum to rush to buy amid continuous price rise. The demand side failed to provide effective support for price increases, becoming the main variable constraining upside room. In terms of supply, the industry's supply side showed a tightening trend this week. In terms of operating rate, affected by the shortage of input VAT invoices, the weekly operating rate of secondary aluminum industry leaders declined 1 percentage point WoW to 53.9%, with some aluminum smelters forced to cut production and new supply sources decreasing. In terms of inventory, according to SMM statistics, as of Thursday, social inventory of secondary aluminum alloy ingots in China's major consumption areas decreased 400 mt WoW to 62,500 mt, ending seven weeks of inventory buildup; supply contraction, combined with increased trader shipments amid widening spot-futures price spread and the release of downstream and manufacturer repurchase demand, jointly drove destocking. Import side, ex-China ADC12 quotes stayed high at $3,360-3,460/mt, and although the theoretical import loss narrowed, it remained as deep as 3,200 yuan/mt, with the import window remaining closed. The resonance of production cuts, destocking, and import obstruction provided strong support for prices on the supply side. Overall, the tight invoice supply and increasingly stringent compliance supervision on the cost side are unlikely to ease in the short term, with raw material and tax costs expected to stay high; on the supply side, if the invoice shortage continues to ferment, the scale of industry production cuts will further expand, and combined with low social inventory levels and the closed import window, spot cargo circulation volume will be difficult to increase effectively. However, continued weakness on the demand side will suppress price gains. In the short term, ADC12 prices have limited downside room, and an upward breakthrough also lacks effective support from the demand side. Prices are expected to run in a generally stable with slight rise pattern overall.
![Export Demand Offsets Weak Domestic Consumption, China Aluminum Prices Expected to Fluctuate in the Short Term [SMM Aluminum Price Weekly Review]](https://imgqn.smm.cn/usercenter/SUuNM20251217171651.jpg)
