SMM, March 4:
The US-Iran conflict disrupted aluminum fundamentals, triggering an urgent risk-off sentiment among investors. Spot primary aluminum rose 440 yuan/mt from the previous trading day. The aluminum scrap market actively followed the rally, though slight regional divergence remained. After the Lantern Festival, domestic aluminum scrap yards and downstream scrap utilization enterprises had basically fully resumed normal production pace, but end-use demand recovered slowly, and actual raw material restocking fell short of expectations.
Aluminum scrap prices are expected to hover at highs this week, with shredded aluminum tense scrap (priced based on aluminum content) mainly trading around 19,000-19,800 yuan/mt (tax excluded). Supply side, yards had basically fully resumed operations, and the release of available cargo is set to increase, but recycling policies still constrained circulation. Demand side, downstream enterprises accelerated their pace of resumption, and restocking demand is expected to be released gradually. Overall, the tug-of-war between sellers and buyers continued; market trading sentiment is set to recover gradually but remain sluggish. Close attention should be paid to downstream resumption progress, primary aluminum price trends, and changes in recycling policies, and vigilance is needed against price fluctuation risks.
