Primary aluminum continues to surge, while aluminum scrap struggles to catch up [Daily Review of Aluminum Scrap]

SMM June 12 News:

Today, spot primary aluminum prices continued to rise by 250 yuan/mt from the previous trading day. SMM A00 aluminum ingot prices closed at 20,650 yuan/mt, and aluminum scrap market prices generally followed suit. 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 centralized quotes for baled UBC scrap range from 15,150 to 15,650 yuan/mt (tax excluded), while the centralized quotes for shredded aluminum tense scrap range from 15,900 to 17,400 yuan/mt (tax excluded). Regionally, areas such as Shanghai, Jiangsu, Shandong, and Jiangxi closely track aluminum prices, with price adjustments ranging from 200 to 250 yuan/mt. In contrast, regions like Hunan, Hubei, Foshan, and Guizhou lag behind in price adjustments, with adjustments ranging from 100 to 150 yuan/mt. By product, the prices of baled UBC and mixed aluminum extrusion scrap free of paint have generally increased slightly by 100 to 150 yuan/mt, while the prices of bare bright aluminum wire and shredded aluminum tense scrap have risen by 200 yuan/mt.

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 narrowed by 21 yuan/mt from yesterday to 1,826 yuan/mt. In Foshan, the price spread between A00 aluminum and aluminum extrusion scrap widened by 141 yuan/mt from yesterday to 1,655 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 expected to remain low, with a persistent struggle between costs and orders.

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