Domestic aluminum scrap prices generally hovered at highs this week. At the beginning of the week, driven by the weakening of primary aluminum prices, some aluminum scrap varieties pulled back slightly. As of September 25, the SMM A00 aluminum price closed at 20,770 yuan/mt, down 10 yuan/mt WoW. Shredded aluminum tense scrap remained tight, with mainstream quotations ranging between 17,200-17,800 yuan/mt (including moisture); baled UBC prices mainly fluctuated within the range of 15,500-16,100 yuan/mt, with a slight pullback in the trading range. Regional performance diverged: aluminum tense scrap quotations in areas such as Anhui declined, while enterprises in Henan, Jiangxi, and Shandong were relatively active in shipments from storage yards due to pre-holiday stocking demand for the National Day holiday. On the downstream side, the operating rate of secondary aluminum enterprises rebounded mildly, but the traditional peak season demand in September fell short of expectations. Mid-week, market activities in Guangdong were temporarily suspended due to Typhoon "Hagibis," but normal receiving, shipping, and production activities have now resumed. Aluminum scrap prices are expected to continue fluctuating at highs next week. On one hand, the tight supply fundamentals of aluminum scrap are difficult to alleviate in the short term, and the supporting effect of downstream pre-holiday stocking demand on prices continues to develop. On the other hand, no further implementation feedback has been received regarding the domestic tax cleanup policy, but in the long term, scrap utilization enterprises still harbor intentions to drive down prices. Overall, the mainstream price range for shredded aluminum tense scrap (including moisture) is expected to hover around 17,300-17,800 yuan/mt, while baled UBC prices are likely to linger near 16,100-15,600 yuan/mt. The market needs to closely monitor the sustainability of downstream stocking demand before the National Day holiday, the actual implementation pace of the tax policy, and further guidance from primary aluminum price trends.
This week, cast aluminum alloy futures showed a V-shaped trend of falling first and then rising, with the most-traded AD2512 contract closing at 20,380 yuan/mt on Thursday. In the spot market, ADC12 prices declined initially before rising, fluctuating rangebound overall. As of September 25, the SMM price was quoted at 20,900 yuan/mt, down 50 yuan/mt WoW, at a premium of 495 yuan/mt against the most-traded contract.
Cost side, pre-holiday raw material stocking demand from secondary aluminum plants was constrained by tight aluminum scrap supply, highlighting procurement pressure. Demand side, as the National Day and Mid-Autumn Festival holidays coincided this year, downstream die-casting enterprises extended their holiday breaks by 1–2 days YoY, with most enterprises taking 3–8 days off (a few maintained production). Although pre-holiday stocking demand boosted transactions for manufacturers and traders, the overall increase was limited.
Supply side, the operating rate of leading secondary aluminum enterprises rose 0.7 percentage points WoW to 56.6%. Currently, large enterprises saw steady to rising orders and actively delivered them, driving up the operating rate. However, Typhoon Hagibis led to the "five suspensions" in Guangdong, causing local enterprises to halt production for 1–3 days and dragging down the regional operating rate. Production and logistics resumed orderly by the afternoon of the 24th.
With the dual holidays, production arrangements in the secondary aluminum industry are diverging next week: some manufacturers plan to maintain production without stoppages; some enterprises intend to take about 3 days off; others have yet to finalize specific holiday plans, pending further clarification based on downstream customer demand and order situations. Overall, holiday factors are expected to impact industry production pace, and the overall operating rate of the secondary aluminum industry is projected to experience a phased pullback next week.
Inventory side, according to SMM statistics, social inventory of secondary aluminum alloy ingots in mainstream consumption areas was 55,700 mt on September 25, up 400 mt WoW, continuing a weak inventory buildup trend.
On Monday, SHFE officially launched the warrant generation business for cast aluminum alloy futures. As of September 25, cast aluminum alloy futures standard warrants had been issued for 19,181 mt, laying the foundation for the smooth implementation of the first contract AD2511’s expiration and delivery in November. However, caution is warranted: if warrants continue to increase significantly in the future, it may intensify delivery pressure and weigh on futures. Overall, cost support from aluminum scrap and pre-holiday stocking demand provide a floor for ADC12 prices, but extended downstream holidays, limited restocking increments, and persistent inventory buildup constrain upside potential. ADC12 prices are expected to fluctuate rangebound next week, with close attention needed on raw material availability, holiday inventory accumulation, and post-holiday demand recovery.
