Aluminum scrap prices experienced narrow adjustments within the week, with significant regional divergence in trends [Weekly Review of Aluminum Scrap and Secondary Aluminum].

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Secondary aluminum raw materials:

This week, the aluminum scrap market showed a generally stable trend with slight rises and regional divergence. As of Thursday, the SMM A00 spot price was 19,800 yuan/mt, down 80 yuan/mt WoW. Affected by primary aluminum price fluctuations, the aluminum scrap market adjusted rangebound overall. Baled UBC rose 100-150 yuan/mt to 14,900-15,500 yuan/mt (tax excluded) during the week, while shredded aluminum tense scrap remained stable at a high level of 15,850-17,350 yuan/mt (tax excluded) due to tight circulation. Regional performance diverged significantly: Hunan, Hubei, Foshan, and Jiangxi continued to stand firm on quotes, without following the significant price adjustments of primary aluminum; East China and central China (Shanghai, Jiangsu, Henan, Anhui) closely followed the rise and fall of primary aluminum. The market's structural imbalance was prominent, with aluminum tense scrap supported by tight supply showing strong resistance to price declines, while downstream processing enterprises maintained purchasing as needed due to insufficient orders, with weak restocking momentum during the peak season. In terms of the price difference between A00 aluminum and aluminum scrap, the price difference between A00 aluminum and mechanical casting aluminum scrap in Shanghai increased by 28 yuan/mt to 1,816 yuan/mt WoW; the price difference between A00 aluminum and aluminum extrusion scrap in Foshan increased by 10 yuan/mt to 1,626 yuan/mt WoW, continuing to fluctuate rangebound. It is expected that the aluminum scrap market will continue its structural strength next week, with the price center possibly slightly rising. The main reasons are: 1) Supply-side pressure remains, especially the tight circulation of aluminum tense scrap, which is difficult to alleviate in the short term; 2) Primary aluminum prices are more likely to rise than fall due to macro policies and cost support, forming a transmission effect on aluminum scrap; 3) Although downstream operating rates are limited, rigid demand still exists, and some scrap utilization enterprises may restock at low prices. If orders in the aluminum processing industry continue to be weak, it may limit the upside potential. It is expected that high-grade scrap such as shredded aluminum tense scrap will still be stronger than low-grade varieties, and regional price differences may further expand. It is necessary to focus on changes in the operating rates of secondary aluminum enterprises and aluminum inventory changes.

Secondary aluminum alloy:

This week, the secondary aluminum alloy market remained stable overall. As of April 17, the SMM ADC12 price was flat at 20,600 yuan/mt WoW. In terms of demand, aluminum price fluctuations narrowed WoW, and prices gradually stabilized, so downstream purchasing sentiment improved slightly, but overall, it was still mainly rigid demand purchases. The end-use consumer market continued to be weak, facing order shrinkage and destocking pressure of finished products, forcing some secondary aluminum plants to lower prices and reduce profits, exacerbating profit margin compression. It is also necessary to pay attention to recent tariff policy adjustments, which may suppress the exports of domestic die-casting enterprises. On the supply side, constrained by weak demand and high costs, the operating rates of secondary aluminum plants continued to decline and remained under pressure in the short term. In terms of imports, overseas ADC12 quotations remained stable at $2,450-2,470/mt this week, and the immediate loss of imported ADC12 remained in the range of 700-900 yuan/mt. Overall, under the dominance of weak demand, ADC12 prices will continue to be in the doldrums in the short term. It is necessary to focus on the impact of aluminum raw material price fluctuations and tariff policies on export orders.