Aluminum prices rise slightly, while aluminum scrap prices remain stable [Daily Review of Aluminum Scrap]

SMM, May 29:

Today, spot primary aluminum prices rose by 30 yuan/mt compared to the previous trading day. SMM A00 aluminum ingot prices closed at 20,380 yuan/mt. Aluminum scrap market prices were generally flat compared to yesterday but remained at highs overall. With the off-season in June approaching, downstream processing enterprises are experiencing weak order releases, and procurement is mainly driven by immediate needs.

Today, the quoted prices for baled UBC aluminum scrap are concentrated in the range of 15,250-15,850 yuan/mt (tax-exclusive), while the quoted prices for shredded aluminum tense scrap are concentrated in the range of 15,700-17,200 yuan/mt (tax-exclusive). Regionally, Shanghai, Jiangsu, Henan, Shandong, and other places are closely linked to aluminum prices, with price adjustments ranging from 0-50 yuan/mt. Jiangxi, Hunan, Hubei, Anhui, and other places have chosen to maintain their prices, which are flat compared to yesterday. According to the SMM survey, regarding the implementation progress of "reverse invoicing," Anhui, Henan, Hubei, and other places have gradually increased their efforts to implement invoicing. Traders in relevant regions have once again adopted a wait-and-see sentiment towards subsequent prices.

In the short term, aluminum scrap market prices are expected to continue fluctuating at highs. The tight supply situation for aluminum tense scrap is difficult to change, providing solid price support. Wrought aluminum alloy scrap will continue to fluctuate rangebound with primary aluminum, but the accumulation of risks associated with a high-level correction in primary aluminum prices, combined with weak demand during the off-season, limits upside room. For downstream enterprises using aluminum scrap, the ongoing struggle between cost pressure and weak terminal orders may keep operating rates low. The narrowing of import losses may partially alleviate supply pressure, but the transmission effect will be limited. Regional and product price differences may further diverge. Tight supply in South China and other regions may support localized price increases, while prices in regions with weak demand will face downward pressure.

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