Aluminum prices continue to adjust slightly downward, with aluminum tense scrap prices in Anhui region adjusted by 200 yuan/mt in a single day [Daily Review of Aluminum Scrap]

SMM June 9 News:

Today, spot primary aluminum prices saw a slight decrease of 20 yuan/mt compared to the previous trading day. SMM A00 spot aluminum closed at 20,210 yuan/mt, while aluminum scrap market prices generally remained stable. As the off-season in June begins, downstream scrap utilisation enterprises are experiencing weak order releases, with procurement mainly driven by immediate needs.

Today, the concentrated quotes for baled UBC aluminum scrap range from 15,000-15,500 yuan/mt (tax excluded), while shredded aluminum tense scrap quotes are concentrated at 15,500-17,000 yuan/mt (tax excluded). Regionally, areas such as Shanghai, Jiangsu, and Shandong closely track aluminum prices, with price adjustments ranging from 0-50 yuan/mt. In Jiangxi, Foshan, Guizhou, and other regions, price adjustments lag behind aluminum price movements, with quotes remaining unchanged from yesterday. In Anhui, today saw concentrated price adjustments for ADC12 aluminum shavings and mechanical casting aluminum scrap, with adjustments ranging from 100-200 yuan/mt. By product, baled UBC prices remained unchanged from the previous trading day in Henan, Foshan, and Jiangxi, while Sichuan, Chongqing, Shanghai, and Zhejiang saw an overall decrease of 50 yuan/mt.

It is expected that the aluminum scrap market will continue to fluctuate 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 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 is likely to remain low, with a difficult balance between costs and orders. Regarding reverse invoicing, Jiangxi, Anhui, Hubei, and other regions are 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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