Introduction
In H1 2026, the overseas secondary aluminum market broadly followed an upward-then-downward trend. In early Q2, driven by a stronger LME aluminum price, ongoing tensions in the Middle East, and supply-side disruptions, aluminum scrap and ADC12 prices rallied rapidly, with risk premiums accumulating. Entering the second half of Q2, as Middle East logistics gradually normalized, LME prices pulled back, and end-use demand recovery fell short of expectations, the market returned to supply-demand fundamentals, and the price center shifted lower.
More notable than the price movement itself is the ongoing shift in market pricing logic. In H1, from the UAE's scrap export restrictions to the EU's proposed aluminum scrap export tariff and the US launch of a supply chain security investigation into aluminum scrap exports, major global economies have been successively signaling stronger management of recycled resources. Aluminum scrap is evolving from a conventional traded commodity into a key strategic resource for safeguarding domestic manufacturing, low-carbon transition, and supply chain security. This means future price fluctuations in the overseas secondary aluminum market will be influenced not only by supply-demand dynamics but increasingly by policy and trade flows.
Imported Aluminum Scrap Prices Continue to Fall, Import Window Yet to Open
This week, imported aluminum scrap prices in China moved lower again. Imported aluminum scrap prices at Ningbo port were lowered from 22,520 yuan/mt to 21,920 yuan/mt, and at Tianjin port from 22,570 yuan/mt to 21,970 yuan/mt.
Although imported prices continued to pull back, market participants generally indicated that overseas scrap quotes remained relatively high, the import window had not fully opened, and domestic enterprises were buying mostly on a just-in-time restocking basis, with limited overall transactions.
As overseas aluminum scrap prices kept correcting, expectations for the import window to open in H2 gradually increased. Some traders noted that if overseas scrap prices continue to fall, import profits in September-October are expected to recover, potentially leading to a rebound in imports.
Overseas Aluminum Scrap Prices Fall Across the Board, Market Returns to Supply-Demand Logic
Overseas aluminum scrap markets generally showed a broad-based decline this week.
In Thailand, aluminum wire and cable (Cable) prices were lowered from 120,500 Thai baht/mt to 103,500 Thai baht/mt, and baled UBC fell from 83,000 Thai baht/mt to 79,000 Thai baht/mt.
In Malaysia, aluminum tense scrap prices dropped from $2,675/mt to $2,600/mt; aluminum wire (Talon) was lowered from 15,250 ringgit/mt to 13,500 ringgit/mt; and UBC prices pulled back slightly from 9,750 ringgit/mt to 9,650 ringgit/mt.
The SMM survey learned that most overseas scrap suppliers reported that downstream purchasing demand remained sluggish, and while inquiries still existed, actual transactions were noticeably reduced. Earlier, the UAE's solid scrap export restriction policy had fueled market sentiment and briefly triggered expectations of tighter supply, but as the market gradually digested the policy impact, the tight-supply sentiment eased significantly, and prices returned to being dominated by supply-demand dynamics.
Meanwhile, some scrap suppliers began to proactively cut prices to sell and reduce inventory, reflecting an overall market still in oversupply, with no clear support for prices in the short term.
Southeast Asia ADC12 Transactions Sluggish, Buyers' and Sellers' Price Expectations Continue to Shift Lower
The Southeast Asia ADC12 market overall remained in the doldrums this week.
Domestic trade ADC12 prices in Thailand were slightly lowered from 104.75 Thai baht/kg to 104.50 Thai baht/kg, and FOB quotes were cut from $3,150/mt to $3,130/mt. Malaysia’s domestic trade ADC12 price stayed at 12.85 ringgit/kg, while FOB quotes held steady at $3,135/mt.
Although mainstream quotations remained around $3,130/mt, actual transaction prices gradually moved lower, and overseas deals were mostly concentrated in the $3,120–3,140/mt range.
Several market participants noted that transactions had visibly declined over the past two weeks, with some traders even reporting almost no actual deals. At the same time, downstream purchasing remained cautious, and Chinese buyers’ target procurement prices had gradually moved down to around $3,000/mt. Rumors of transactions at $2,950/mt also surfaced but have not been widely confirmed.
On the other hand, due to mediocre performance in end-use orders, some secondary aluminum smelters in Malaysia and Thailand had already begun to proactively reduce scrap purchases and relied mainly on digesting existing inventories. Overall restocking willingness was weak, further weighing on aluminum scrap and ADC12 prices.
US and EU Resource Protection Policies Remain a Market Focus
While short-term trading attention returned to supply-demand fundamentals, policy factors remain a key variable influencing the medium and long-term aluminum scrap trade landscape.
This week, the market continued to monitor the progress of the EU's proposed 15% export tax on aluminum scrap. If the policy is eventually implemented, the cost of exporting European aluminum scrap will rise significantly, and Asian buyers may increase their purchases of scrap from the US and other regions, potentially triggering a new round of adjustments in global scrap trade flows.
At the same time, the US Secure Aluminum Supply Chains Act (HB 9161) remains in progress. The Act investigates potential supply chain and manufacturing security issues arising from US exports of high-quality aluminum scrap. It is widely believed in the market that if the US further tightens restrictions on such exports, the availability of high-quality scrap in Asia may decrease, constraining regional supply and possibly providing price support later.
However, at present, both policies still involve significant uncertainty. In the short term, their market impact is mostly sentiment-driven, while actual supply-demand changes will need to be observed further after the policies are officially implemented.
SMM Outlook
SMM believes the overseas secondary aluminum market will remain in the doldrums in the short term. As earlier supply disruptions caused by geopolitical factors gradually fade, the market returns to supply-demand fundamentals. With end-use consumption still slow to recover and downstream purchasing interest insufficient, aluminum scrap and ADC12 prices continue to face some downward pressure.
In the medium and long term, however, resource protection policies in the US and EU could still alter global aluminum scrap trade flows. If the EU export tax and US scrap export restrictions are progressively implemented, the supply of high-quality aluminum scrap in Asia may tighten again, which could provide renewed support for market prices.
Going forward, the market should focus on the progress of US and EU aluminum scrap resource protection policies, changes in international geopolitics, and the demand recovery in end-use industries such as automotive and die-casting, as these will be the core variables shaping the H2 overseas secondary aluminum market trend.
