Aluminum prices retreat, aluminum scrap prices generally adjust downward [Daily Review of Aluminum Scrap]

SMM, May 30:

Today, spot primary aluminum prices fell by 90 yuan/mt compared to the previous trading day. SMM A00 spot aluminum closed at 20,290 yuan/mt. Prices in the aluminum scrap market varied, but overall, they remained at high levels. With the off-season in June approaching, downstream processing enterprises are experiencing weak order releases, and purchases are mainly driven by immediate needs.

Today, the concentrated quotes for baled UBC aluminum scrap range from 15,250 to 15,850 yuan/mt (tax excluded), while the concentrated quotes for shredded aluminum tense scrap range from 15,600 to 17,100 yuan/mt (tax excluded). Regionally, Shanghai, Jiangxi, Jiangsu, Henan, Shandong, and other places closely track aluminum prices, with price adjustments ranging from 50 to 100 yuan/mt. In Guizhou and Foshan, prices remained unchanged from yesterday. 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 18 yuan to 1,845 yuan/mt compared to yesterday, while the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan decreased by 90 yuan to 1,424 yuan/mt compared to yesterday. According to an SMM survey, regarding the implementation progress of "reverse invoicing," Anhui, Henan, Hubei, and other places have continued to increase their efforts in implementing invoicing. Traders in relevant regions have once again adopted a wait-and-see attitude towards subsequent prices.

In the short term, aluminum scrap market prices are expected to continue fluctuating at highs. The tight supply of aluminum tense scrap is unlikely 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 potential high-level correction in primary aluminum prices, combined with weak demand during the off-season, will limit upside room. For downstream aluminum scrap-using enterprises, cost pressures and weak terminal orders continue to compete, and the operating rates of enterprises may remain low. The narrowing of import losses may partially alleviate supply pressures, 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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