Domestic aluminum scrap prices fluctuated at highs this week but pulled back during the week, mainly dragged down by weaker primary aluminum prices. As of September 18, the SMM A00 aluminum price closed at 20,780 yuan/mt, down 80 yuan/mt WoW. The tight supply pattern in the aluminum scrap market remained unchanged, with particularly tight shredded aluminum tense scrap resources supporting price resilience. The quoted price center dropped back slightly to 17,300–17,800 yuan/mt this week, while baled UBC prices fluctuated in the range of 15,600–16,100 yuan/mt. Regional performance diverged significantly: scrapyards in Jiangxi and Hunan collectively lowered quotes after earlier wait-and-see attitudes, while some enterprises in Henan and Shandong were forced to purchase at high prices due to early National Day stockpiling demand. Although operating rates at downstream secondary aluminum enterprises recovered mildly, the September peak season fell short of expectations, with the market showing a tug-of-war between weak supply and demand and high costs. Aluminum scrap prices are expected to continue hovering at highs next week, with both downside risks and cost support present. From a macro perspective, US Fed interest rate cuts intensified market volatility. Although domestic tax cleanup policies are in a transition period, medium and long-term, they will push up tax costs for scrap utilization enterprises and be passed on to bargain down purchasing prices. On the other hand, the tight supply of aluminum scrap is unlikely to ease in the short term, especially as tight shredded aluminum tense scrap resources give suppliers strong bargaining power. SMM expects the mainstream range for shredded aluminum tense scrap (water price) to hover around 17,300–17,800 yuan/mt, with baled UBC prices lingering at 15,600–16,100 yuan/mt. The market needs to closely monitor the implementation pace of tax policies, the sustainability of downstream stocking demand, and primary aluminum price guidance.
Cast aluminum alloy futures fluctuated lower this week, with the most-traded 2512 contract closing at 20,320 yuan/mt on Thursday. In the spot market, the ADC12 price center dropped back slightly. As of September 18, the SMM quote fell 100 yuan/mt WoW to 20,950 yuan/mt, with the premium against the most-traded contract widening to 560 yuan/mt. Cost side, aluminum prices pulled back during the week, aluminum scrap traders' willingness to sell strengthened, market circulation marginally improved, and raw material procurement pressure for secondary aluminum plants eased slightly, but the overall tight supply pattern remained unchanged. Demand side, the downstream continued a mild recovery past mid-September, with the peak season performance being average. As the National Day holiday approaches, die-casting enterprises have successively confirmed holiday arrangements, with most enterprises starting holidays on October 1. About 20% of enterprises will suspend production for no more than 2 days, nearly 60% for 8 days or more, and about 20% for 3–6 days. Pre-holiday stockpiling demand provided phased support to spot prices. Additionally, influenced by a stronger spot-futures price spread, trading activity improved this week. Supply side, SMM survey showed that driven by improved raw material procurement and order recovery, the operating rate of leading secondary aluminum enterprises rose 0.4 percentage points WoW to 53.9%. Import side, overseas ADC12 quotes concentrated at $2,530–2,550/mt, while domestic spot prices fell 200 yuan/mt during the week to 20,100–20,300 yuan/mt, with immediate import losses remaining around 200 yuan/mt. Inventory side, according to SMM statistics, social inventory of secondary aluminum alloy ingots in mainstream domestic consumption areas was 55,300 mt on September 18, up 1,500 mt WoW. The generation of cast aluminum alloy futures standard warrants will commence from September 22, 2025 (next Monday), and warrant registration next week needs attention. Overall, impacted by the US Fed interest rate cut realization, macro sentiment was under pressure, while fundamentals saw a tug-of-war between longs and shorts: rigid costs and pre-holiday stockpiling demand provided support, but weak demand recovery and inventory accumulation risks posed pressure. ADC12 prices are expected to maintain high fluctuations in the short term. Follow-up requires close attention to raw material supply conditions, demand recovery pace, registered warrant changes, and policy implementation.
