SMM November 13:
Spot primary aluminum prices rose today compared with the previous trading day, with SMM A00 aluminum closing at 21,920 yuan/mt. Aluminum scrap prices followed the uptrend in aluminum prices. With the end of the traditional peak season, downstream demand showed a clear divergence. Demand for aluminum scrap from casting aluminum alloys remained robust, providing more consumption support, while demand from wrought aluminum alloys began to show signs of weakening. However, tight market supply remained the main theme, keeping procurement prices high, though the sustainability of these high levels remains to be seen.
Baled UBC was quoted at 16,550-17,050 yuan/mt (ex-tax) today, while shredded aluminum tense scrap (priced based on aluminum content) was quoted at 17,650-18,550 yuan/mt (ex-tax). Baled UBC prices rose 100 yuan/mt WoW, while clean tapping aluminum wire, shredded aluminum tense scrap (priced based on aluminum content), scrap wheel hub, mechanical casting aluminum scrap, and aluminum shavings increased 100-250 yuan/mt WoW. With the rise in spot aluminum prices today, aluminum scrap prices in Foshan, Henan, Guizhou, and Jiangxi followed suit, up 100-200 yuan/mt, while prices in Shanghai, Zhejiang, Jiangsu, and Tianjin mainly increased 200-250 yuan/mt. In terms of the price difference between A00 aluminum and aluminum scrap, the price difference between A00 aluminum and mechanical casting aluminum scrap in Shanghai widened by 250 yuan from the previous trading day to 3,182 yuan/mt, and the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan widened by 122 yuan to 2,571 yuan/mt.
Aluminum scrap market is expected to hold up well this week, with the mainstream price range for shredded aluminum tense scrap (priced based on aluminum content) likely to move up to 17,900-18,400 yuan/mt. Continued positive signals from the domestic and international macro environment, along with an expected sustained improvement in orders for downstream casting alloy processing, will provide ongoing support for aluminum scrap prices. However, two risks require caution: first, against the backdrop of high aluminum prices, enterprises are making just-in-time procurement and reducing raw material inventory accumulation, which may suppress prices; second, the implementation of environmental protection-driven production restrictions in central China and the potential risk of a pullback in primary aluminum prices after a rapid rise. If these risks materialize, the aluminum scrap market could face downward pressure. Overall, the aluminum scrap market will continue to experience a complex tug-of-war between sellers and buyers. Market participants are advised to closely monitor primary aluminum price trends, changes in downstream demand, and developments in environmental protection policy.
