SMM, May 16:
Today, spot primary aluminum pulled back by 80 yuan/mt from the previous trading day. SMM A00 aluminum ingot prices closed at 20,270 yuan/mt. Overall aluminum scrap market prices declined. As we entered the mid-to-late May, the transition between the off-season and peak season has led to sluggish order releases from downstream processing enterprises, with procurement mainly driven by immediate needs.
Today, the centralized quotes for baled UBC aluminum scrap ranged from 15,300 to 15,900 yuan/mt (tax excluded), while the centralized quotes for shredded aluminum tense scrap ranged from 15,750 to 17,250 yuan/mt (tax excluded). Regionally, areas such as Hubei and Guizhou chose to maintain their prices, with no overall adjustments made. Price adjustments lagged behind those of primary aluminum. In other regions, such as Jiangxi, Shanghai, Jiangsu, and Henan, price adjustments ranged from 50 to 100 yuan/mt, closely following aluminum price movements. 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 25 yuan/mt from yesterday to 1,825 yuan/mt. The price spread between A00 aluminum and aluminum extrusion scrap in Foshan narrowed by 100 yuan/mt from yesterday to 1,424 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. Overall, during the transition period between the off-season and peak season, with weak supply and demand in the market, the differentiation between varieties and regional price differences may further emerge. It is necessary to remain vigilant about macro risks such as a policy shift by the US Fed, geopolitical conflicts, etc., which could trigger sharp fluctuations in primary aluminum prices, or concentrated production cuts by domestic secondary aluminum enterprises, which could put pressure on aluminum scrap prices.
