Aluminum scrap's room for price increase hit a bottleneck today, with baled UBC prices raised by 150 yuan/mt in a single day [Daily Review of Aluminum Scrap]

SMM June 13 News:

Today, spot primary aluminum prices continued to rise by 80 yuan/mt compared to the previous trading day. SMM A00 aluminum ingot prices closed at 20,730 yuan/mt, with aluminum scrap market prices following suit but with varying degrees of increase. As the off-season of June progresses past the halfway mark, downstream scrap utilisation enterprises are experiencing sluggish order releases, with procurement primarily driven by immediate needs.

Today, the quoted prices for baled UBC aluminum scrap are concentrated in the range of 15,300-15,800 yuan/mt (tax not included), while the quoted prices for shredded aluminum tense scrap are concentrated in the range of 15,900-17,400 yuan/mt (tax not included). Regionally, areas such as Shanghai, Jiangsu, and Shandong closely track aluminum prices, with price adjustments ranging from 50-100 yuan/mt. In contrast, regions like Jiangxi, Hubei, and Henan lag behind aluminum price adjustments, and after two consecutive days of price increases, today's quotes remain unchanged from yesterday, indicating a bottleneck in upward price movement. By product, baled UBC aluminum scrap, after a slight increase in the previous two days, rose by 150 yuan/mt today, narrowing the price difference between A00 aluminum and aluminum scrap; shredded aluminum tense scrap prices remained unchanged from yesterday.

It is expected that the aluminum scrap market will continue to fluctuate at highs. The tight supply situation for 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. Additionally, after the listing of cast aluminum alloy futures, arbitrage activities may temporarily boost market activity, potentially increasing the price sensitivity of aluminum scrap, a core raw material. Caution is advised against short-term price fluctuations.

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