Aluminum Prices Retreat, Sentiment in Aluminum Scrap Market Grows More Cautious [Aluminum Scrap Daily Review]

SMM June 16 News:

Today, spot primary aluminum prices continued to decline by 100 yuan/mt from the previous trading day. SMM A00 aluminum ingot prices closed at 20,630 yuan/mt, while aluminum scrap market prices followed with varying degrees of increase. As the off-season in June progresses beyond 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 15,350-15,850 yuan/mt (tax excluded), while the quoted prices for shredded aluminum tense scrap are concentrated in the range of 15,900-17,400 yuan/mt (tax excluded). 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, Henan, and Foshan lag behind aluminum price movements. After following the upward trend in aluminum prices last week, today's quoted prices remain unchanged from last Friday, with a wait-and-see sentiment prevailing. By product, baled UBC aluminum scrap prices increased by another 50 yuan/mt today after a slight increase last week, narrowing the price difference between A00 aluminum and aluminum scrap. Shredded aluminum tense scrap prices remained unchanged from last Friday.

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 persistent struggle between costs and orders. Additionally, after the listing of cast aluminum alloy futures, arbitrage activities may temporarily boost market activity. As aluminum scrap is a core raw material, its price sensitivity may increase, necessitating vigilance against short-term volatility risks.

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