Spot aluminum prices pulled back slightly, aluminum scrap market remains steady [Aluminum Scrap Daily Review]

SMM, July 20 –

SMM A00 spot aluminum closed at 23,190 yuan/mt today, edging down 30 yuan/mt MoM. The aluminum scrap market was largely stable. On the price spread front, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan stood at 2,012 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap in Foshan was 698 yuan/mt, both still at extremely low levels. Supply-side constraints continued to intensify, with the reverse invoicing policy impact deepening and compliant, invoiced aluminum scrap becoming increasingly scarce. On imports, China’s aluminum scrap imports in June 2026 were approximately 133,000 mt, down 16.9% YoY and 12.5% MoM, marking a third straight month of decline. Total imports in January-June 2026 reached 982,000 mt. As overseas aluminum scrap quotes kept pulling back, orders for aluminum scrap imports from Southeast Asia to Guangdong recently increased from prior levels, with the import window improving further versus earlier. However, new deals remained concentrated mainly in select low-priced cargoes and long-term clients, limiting overall spot market activity.

The aluminum scrap market is expected to keep moving sideways at high levels. Supply side, the constraint from the reverse invoicing policy is unlikely to ease in the near term, and tightness in invoiced aluminum scrap will persist. Import side, multiple bearish factors will gradually play out in coming months, keeping overseas high-quality scrap supply low. Demand side, downstream operating rates remain low as the off-season deepens; end-user orders show little real improvement; scrap utilization enterprises continue to purchase as needed, making a noticeable pickup in buying sentiment unlikely. The price spread between primary and scrap aluminum has narrowed to historic lows, eroding scrap’s cost advantage over primary aluminum significantly. Should aluminum prices fall further, substitution effects will accelerate.