Aluminum prices fluctuate rangebound, while the aluminum scrap market remains calm. [Daily Review of Aluminum Scrap]

SMM, June 6:

Today, spot primary aluminum prices saw a slight decrease of 20 yuan/mt compared to the previous trading day. SMM A00 aluminum ingot prices closed at 20,230 yuan/mt, while aluminum scrap market prices generally remained stable. As the off-season in June begins, downstream scrap utilisation enterprises are experiencing sluggish order releases, with procurement primarily driven by immediate needs.

Today, the concentrated quotes for baled UBC aluminum scrap range from 15,050 to 15,550 yuan/mt (tax excluded), while shredded aluminum tense scrap quotes range from 15,500 to 17,000 yuan/mt (tax excluded). Regionally, Shanghai, Jiangsu, Shandong, and other places closely track aluminum prices, with price adjustments ranging from 0 to 50 yuan/mt. In Jiangxi, Foshan, Guizhou, and other regions, price adjustments lag behind aluminum prices, with quotes remaining unchanged from yesterday. By product, baled UBC aluminum scrap prices in Henan, Foshan, Jiangxi, and other places remained unchanged from the previous trading day, while prices in Sichuan, Chongqing, Shanghai, Zhejiang, and other places increased by 50 yuan/mt overall.

It is expected that the aluminum scrap market will continue to fluctuate at highs. The tight supply situation 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 risk of a high-level correction in primary aluminum prices, combined with weak demand during the off-season, may suppress upside room. The operating rate of downstream secondary aluminum enterprises may remain low, with a difficult balance between costs and orders. Regarding reverse invoicing, Jiangxi, Anhui, Hubei, and other places are currently actively promoting its implementation among producers and suppliers. According to feedback from some scrap utilisation enterprises, the tax costs arising from reverse invoicing will be shared by suppliers and producers, and these costs will ultimately be passed on to raw material prices. On the other hand, cast aluminum alloy futures will be listed on June 10. Futures arbitrage activities may temporarily boost market activity in the secondary aluminum alloy market. As aluminum scrap is a core production raw material, its price sensitivity may be further heightened.

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