Aluminum Prices Continue to Rise, Aluminum Scrap Prices Follow Suit [Daily Review of Aluminum Scrap]

SMM, May 13:

Today, spot primary aluminum prices rose by 200 yuan/mt from the previous trading day. SMM A00 aluminum ingot prices closed at 20,010 yuan/mt. Overall aluminum scrap market prices increased. As we enter the mid-to-late May, the transition between the off-season and peak season has led to weak order releases from downstream processing enterprises, with procurement mainly driven by immediate needs.
Today, the centralized quotes for baled UBC aluminum scrap ranged from 14,950 to 15,550 yuan/mt (tax not included), while the centralized quotes for shredded aluminum tense scrap ranged from 15,750 to 17,250 yuan/mt (tax not included). By region, price adjustments in Hubei, Anhui, Foshan, Jiangxi, and other places were in the range of 100-150 yuan/mt, while in other regions such as Shanghai, Jiangsu, and Henan, the adjustments were in the range of 150-200 yuan/mt. In terms of the price difference between A00 aluminum and aluminum scrap, the price spread between A00 aluminum and mechanical casting aluminum scrap in Shanghai narrowed by 34 yuan/mt from last Friday to 1,836 yuan/mt. The price difference between A00 aluminum and aluminum extrusion scrap in Foshan increased by 153 yuan/mt from last Friday to 1,539 yuan/mt.
In the short term, the aluminum scrap market may continue to fluctuate at highs. The tight supply situation for aluminum tense scrap products is unlikely to change, providing strong price support. Wrought aluminum alloy scrap products will still be dominated by fluctuations in primary aluminum prices, with narrow adjustments expected. Subsequently, vigilance is needed regarding macro risks such as a policy shift by the US Fed, geopolitical conflicts, which may trigger sharp fluctuations in primary aluminum prices, or concentrated production cuts by domestic secondary aluminum enterprises, which may put pressure on aluminum scrap prices.

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