Aluminum Scrap Market Remains Stable, with Narrow Recovery in Price Difference between A00 Aluminum and Aluminum Scrap [Daily Review of Aluminum Scrap]

SMM, May 22:

Today, spot primary aluminum prices rose by 50 yuan/mt from the previous trading day. SMM A00 aluminum ingot prices closed at 20,360 yuan/mt. Aluminum scrap market prices fluctuated at highs. As we entered 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 not included), while the centralized quotes for shredded aluminum tense scrap ranged from 15,800 to 17,300 yuan/mt (tax not included). Regionally, prices remained stable in multiple areas such as Hubei, Guizhou, and Anhui, with no overall adjustments made. Other regions, including Shanghai, Jiangsu, Henan, and Shandong, closely tracked aluminum prices, with adjustments ranging from 50 to 100 yuan/mt. In Jiangxi, after an overall increase in aluminum scrap prices on Tuesday, today's quotes remained stable without following the changes in primary aluminum prices.

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 increased by 8 yuan/23 mt to 1,861 yuan/mt compared to yesterday. The price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan continued to rise by 40 yuan/mt to 1,533 yuan/mt compared to yesterday.
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 against macro risks such as policy shifts 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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