A00 aluminum plunges in a single day, price difference between A00 aluminum and aluminum scrap returns to historical low again [Aluminum Scrap Daily Review]

SMM, October 15:

Today, SMM A00 aluminum prices closed at 23,260 yuan/mt, down 360 yuan/mt from the previous trading day. The price difference between A00 aluminum and aluminum scrap narrowed significantly: on October 15, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was about 2,155 yuan/mt, narrowing 337 yuan/mt from last Thursday; the price difference between A00 aluminum and shredded aluminum tense scrap was about 711 yuan/mt, narrowing 615 yuan/mt. Supply side, tax inspections in central China continued to deepen, making compliant invoiced aluminum scrap increasingly scarce, and invoice-holding enterprises showed strong willingness to hold prices firm. Competition among enterprises was intense, with some only able to issue 20% of their invoice quotas, keeping effective supply tight. On imports, this week, imported shredded aluminum zorba prices at Ningbo Port and Tianjin Port were recorded at 20,970 yuan/mt (tax inclusive) and 21,020 yuan/mt (tax inclusive), respectively, down 100 yuan/mt from last week. In the short term, the aluminum scrap market is expected to hold up well, with limited downside. Supply side, the scope and intensity of tax inspections remain the core variable, and the tight supply of compliant invoiced cargo is unlikely to ease. Demand side, downstream scrap utilization enterprises are operating at moderate rates during the peak season, and with both supply and demand tight, price support is likely to strengthen further. Additionally, the price difference between A00 aluminum and aluminum scrap has narrowed again to a historical low, weakening the cost advantage of aluminum scrap and bringing primary aluminum substitution back into discussion. Going forward, focus on the spread of tax inspections, changes in invoice quotas across regions, and downstream operating pace.