SHANGHAI, Jun 7 (SMM) – Aluminium scrap prices fell sharply last Friday after aluminium prices slumped on Thursday night. As of June 4, spot prices of A00 aluminium ingots fell 560 yuan/mt, while aluminium scrap prices dropped 200-300 yuan/mt.
Many secondary aluminium companies have reported poor downstream demand since the end of May and hold pessimistic views due to the upcoming off-season. Significant arrivals of imported aluminium alloy ingots drove some traders to sell off ADC12 secondary aluminium.
Secondary aluminium companies plan to reduce inventory and lowered purchase price of aluminium scrap. Aluminium scrap prices will drop slightly with the approaching off-season of July and the price difference between primary aluminium and aluminium scrap will expand.
Prices of ADC12 secondary aluminium dropped 550 yuan/mt last week. Secondary aluminium plants reported poor orders as die-casting plants took a wait-and-see stance amid bearish sentiment.
In addition, persistent car chip shortages, worsening pandemic situation in Guangdong, and power curtailment also led to fewer orders at secondary aluminium plants, which will cause secondary aluminium output to continue to decline in June.
Some traders dumped goods at 400-600 yuan/mt lower than market prices. Overseas prices were relatively firm. The import window was closed, and import loss was about 70 yuan/mt. Secondary aluminium prices will remain weak this week, and transactions will continue to decline.
