Aluminum prices approach the 21,000 resistance level, with limited increase in aluminum scrap prices [Daily Review of Aluminum Scrap]

SMM June 18 News:

Today, spot primary aluminum prices surged significantly by 280 yuan/mt compared to the previous trading day. SMM A00 aluminum ingot prices closed at 20,900 yuan/mt, while the aluminum scrap market struggled to catch up with the price increase. As the off-season in June progresses beyond the halfway mark, downstream scrap utilization enterprises are experiencing weak order releases, with procurement primarily driven by immediate needs.

Today, the centralized quoted prices for baled UBC aluminum scrap range from 15,400 to 15,900 yuan/mt (tax not included), while shredded aluminum tense scrap is quoted at 16,000 to 17,500 yuan/mt (tax not included). Regionally, Shanghai, Jiangsu, Shandong, and other regions closely track aluminum prices, with price adjustments ranging from 200 to 250 yuan/mt. In contrast, Jiangxi, Hubei, Henan, Foshan, and other regions lag behind aluminum price adjustments, with price adjustments ranging from 100 to 150 yuan/mt. By product, baled UBC aluminum scrap prices continued to rise by 50 yuan/mt today, while shredded aluminum tense scrap prices increased by 100 yuan/mt compared to yesterday. Prices for wheel hubs removed from vehicle and scrap motorcycle wheels rose by 100 to 200 yuan/mt compared to yesterday.

In terms of price differences between A00 aluminum and aluminum scrap, the price difference between A00 aluminum and mechanical casting aluminum scrap in Shanghai expanded by 8 yuan/mt to 1,858 yuan/mt compared to yesterday, while the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan increased by 211 yuan/mt to 1,718 yuan/mt compared to yesterday.

Considering the difficulty in actual shipments, aluminum scrap suppliers are adopting a cautious wait-and-see attitude towards price adjustments amidst rising aluminum prices. 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 as a core raw material. Short-term volatility risks should be monitored.

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