SHANGHAI, Dec 14 (SMM)—Aluminium prices traded at highs last week, with prices in east China up 110 yuan/mt from a week ago on December 11. Die-casting plants rejected higher secondary aluminium prices as most of them are already struggling in losses at current prices. Large secondary aluminium producers kept offers unchanged between 17,000-17,500 yuan/mt as of December 11. Small and medium-scale producers and traders also kept offers stable between 16,500-16,800 yuan/mt. Mainstream prices of imported ADC12 secondary aluminium in the domestic spot market stabilised between 16,300-16,600 yuan/mt. Offers of ADC12 secondary aluminium to Japan rose $150/mt to $2,450-2,570/mt cif on the back of robust demand in Japan.
Market demand remains stable, but has shown signs of weakening as chip shortages overseas have forced a small number of automakers to suspend or reduce production.
Eased concerns of future supply shock from imported cargoes and high aluminium prices made it more difficult to secure aluminium scrap. Raw material shortages may force some secondary aluminium producers to cut output in December or January.
The import volume of aluminium scrap was very limited due to few import quotas and hampered imports under the new tariff code. The import window of ADC12 secondary aluminium continued to narrow due to rising prices in Japan, resulting in very small amounts of imported aluminium alloy ingots.
Slower rise in domestic aluminium prices has increased trading activity in the secondary aluminium market, but it takes time for buyers to accept high prices. As such, secondary aluminium prices may lack upward momentum in the short term.
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