Off-Season Drags on Gains, Aluminum Scrap Follows with Insufficient Increases [Aluminum Scrap Daily Review]

SMM, August 4 news:

Today, SMM A00 spot aluminum prices closed at 23,730 yuan/mt, up 230 yuan/mt DoD from the previous trading day. Aluminum scrap prices followed the upward trend across regions, with some areas adopting a wait-and-see stance for specific grades. On the price spread side, as of August 4, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan stood at about 2,160 yuan/mt, while that for shredded aluminum tense scrap was about 950 yuan/mt. Against the backdrop of an off-season in consumption, low willingness to sell at low prices was common among aluminum scrap suppliers, and aluminum scrap prices remained generally firm. Demand side, with the onset of high-temperature holidays, operating rates at downstream cast aluminum alloy enterprises declined, and orders shrank; secondary aluminum plate/sheet and strip enterprises maintained moderate operating levels, but overall raw material demand support notably slipped compared to Q2. In the short term, supply-side tightness for compliant, invoiced cargoes persists, with suppliers' reluctance to sell at low prices providing bottom support for prices. Import side, the lagged effects of the UAE export ban and EU tariff hike policies will become increasingly apparent in the coming months, with port arrivals staying low from June to August. Demand side, the sluggish downstream orders trend is unlikely to reverse in the near term, and scrap utilization enterprises will most likely extend the strategies of purchasing as needed and keeping low inventory, with purchasing sentiment expected to show no significant improvement.