[SMM Cast Aluminum Alloy Morning Comment: Aluminum Scrap Prices Hover at Highs, ADC12 Driven by Costs Unlikely to Decline in the Short Term] Overall, current ADC12 prices are strongly supported by costs, coupled with downstream stocking demand ahead of the National Day holiday. It is expected to maintain a pattern of fluctuating at highs in the short term. Subsequent attention should be paid to raw material supply conditions, the pace of demand recovery, and potential market impacts from policy developments.

Futures side, during the previous trading day's night session, the most-traded SHFE aluminum 2510 contract opened at 21,045 yuan/mt, with the highest price at 21,055 yuan/mt, the lowest price at 20,995 yuan/mt, and closed at 21,000 yuan/mt, up 25 yuan/mt or 0.12% from the previous close.

[SMM Cast Aluminum Alloy Morning Comment: Aluminum Price Sees Slight Correction, ADC12 Fluctuates at Highs in Short Term; Focus on Raw Material Supply and Demand Recovery Progress] On Monday, the aluminum price saw a slight correction, while the SMM ADC12 price remained stable at 21,050 yuan/mt. Due to tight domestic and overseas aluminum scrap circulation resources and increased demand from scrap utilization enterprises, the aluminum scrap market shortage has intensified, continuing to support the ADC12 price from the cost side. Meanwhile, on the demand side, downstream procurement sentiment has slightly recovered since September, with demand continuing to rebound, but the actual strength of the traditional peak season remains to be verified.

[SMM Cast Aluminum Alloy Morning Comment: Aluminum Scrap Supply Shortage Intensifies, ADC12 Price Fluctuates at Highs] Last Friday, the aluminum price broke through the 21,000 yuan/mt mark, and the SMM ADC12 price rose again by 100 yuan/mt to 20,950 yuan/mt. Affected by tight domestic and overseas aluminum scrap circulation resources and increased demand from scrap utilization enterprises, the aluminum scrap market shortage has intensified, with hoarding phenomena driving prices up rapidly. To ensure order delivery, some manufacturers are procuring at high prices or across regions, and continuously rising costs are further boosting the ADC12 price.

An aluminum enterprise in Shandong adjusted the benchmark price for its prebaked anode tender for September 2025, up 93 yuan/mt MoM. Meanwhile, a major domestic prebaked anode sales company raised its sales price, up 94 yuan/mt MoM. The raw material market for prebaked anodes is currently diverging, but the price of the main raw material, petroleum coke, remains on an upward trend, driving up overall costs and providing some support for prebaked anode prices. Supported by the raw material market, prebaked anode prices are expected to have further room for increase.

This week, the overall operating rate of leading aluminum downstream processing enterprises in China rose 0.4 percentage points WoW to 62.1%, with the "September peak season" effect continuing to strengthen and various sectors showing a stepwise recovery pattern. The operating rate of the primary aluminum alloy sector increased significantly by 1 percentage point to 57.6%, driven by strong capacity release from top-tier enterprises, though small and medium-sized enterprises still faced order gaps. The aluminum wire and cable industry's operating rate edged up 0.4% to 65.2%, as regional environmental protection inspections were lifted, but capacity recovery in Hebei lagged behind expectations, while power grid orders supported higher operating rates at leading firms. The aluminum extrusion operating rate rebounded 1 percentage point to 54%, with accelerated transition from architectural to industrial profiles, processing fees for PV frames hitting bottom and stabilizing, and new orders for automotive extrusion becoming a highlight. The operating rate of leading aluminum plate/sheet and strip enterprises held steady at a high of 68.6%, as the can stock stockpiling cycle neared its end, and demand resilience in automotive/3C sectors stood out. The aluminum foil industry's operating rate remained at a peak level of 71.9%, though peak season order growth fell short of expectations, with stable demand for packaging foil and battery foil. The operating rate of secondary aluminum producers rose slightly by 0.5% to 53.5%, as consumption-side improvements drove the rebound, but raw material shortages and policy factors continued to constrain capacity recovery. SMM believes that, driven by consumption recovery in terminal sectors such as 3C, automotive, and PV, the aluminum processing industry has re-entered its peak season rhythm. Although the real estate sector remains sluggish, ongoing order releases in the new energy sector have effectively offset this, and downstream aluminum consumption is still expected to increase. SMM expects the operating rate of the aluminum processing industry to continue rising in mid-September, but cautions about the impact of high aluminum prices on downstream stocking willingness.