Aluminum scrap recycling volume dropped before the CNY holidays and supply remained tight

Transaction on the primary aluminum market declined today, and bulls reduced their positions. The average spot price of SMM east China primary aluminum fell by 70 yuan/mt to 18,910 yuan/mt; the average spot price of SMM Foshan primary aluminum dropped by 70 yuan/mt to 19,050 yuan/mt. There were differences in the performance of the domestic aluminum scarp market between the north and the south. In Jiangxi, Hunan, Hubei and other regions, downstream secondary aluminum alloy ingot companies had stable operating rate, with large pre-holiday stockings. However, the aluminum scarp supply market was relatively tight, and companies mostly stabilized prices or increased purchases. The price for aluminum scarp increased by about 0-100 yuan/mt. In Shandong, Henan, Hebei and other regions, the operating rate of aluminum scarp downstream enterprises started to weaken, and aluminum scrap prices mainly tracked swing of primary aluminum market. In the short term, the operating rate of aluminium scarp downstream enterprises will be weak, but large manufacturers such as secondary aluminum alloy ingots will be in normal production, and there is sufficient demand for aluminum scarp. However, more aluminum scarp purchasing enterprises will take the CNY holiday, and aluminum scrap recycling volume will decline day by day. In the short-term, the prices are likely to keep up.