Unclear peak-season demand, aluminum scrap struggles to catch up [Daily aluminum scrap review]

SMM, September 1:

Today, SMM A00 spot aluminum prices closed at 24,110 yuan/mt, up another 170 yuan/mt from the previous trading day. China's aluminum scrap market prices generally edged higher, with some regional products recovering the previous day's losses. In terms of price spreads, on September 1, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was about 2,302 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap was about 1,137 yuan/mt, stable WoW. Against the backdrop of a continued rebound in primary aluminum prices, aluminum scrap fluctuations were relatively limited, and the price transmission mechanism was hindered, mainly constrained by two factors: first, the traditional peak season is about to arrive, but downstream secondary aluminum alloy demand has not shown significant improvement; second, high inventories of wrought aluminum alloy scrap raw materials such as doors and windows in Henan and other regions have weakened the elasticity of aluminum scrap price increases. In addition, on the supply side, the "reverse invoicing" policy constraints continued, and the scarcity of compliant invoiced aluminum scrap provided bottom support for aluminum scrap prices. On the import front, this week, imported shredded aluminum prices at Ningbo port were lowered from 21,670 yuan/mt to 21,370 yuan/mt (tax inclusive), and at Tianjin port from 21,720 yuan/mt to 21,420 yuan/mt (tax inclusive). The import window has improved recently compared with before, with traders showing increased inquiry and purchasing enthusiasm, and import supply has increased somewhat. In the short term, the market is currently at the tail end of the traditional off-season, downstream scrap utilization enterprises have not yet seen a clear recovery in orders, the pre-peak season effect is not significant, and scrap utilization enterprises continue to purchase as needed and maintain low inventory strategies, with limited acceptance of price increases. Some enterprises chose to temporarily hold steady and wait and see after earlier price hikes. On the import front, previously traded resources arriving at ports have provided some supply replenishment, but the deeper effects of the UAE ban and EU tariff increases will still limit the volume of high-quality scrap imports.