Latest Update in the SMM Aluminum Scrap Market

[SMM Analysis]Cost Support and Weakening Marginal Demand Intertwined, ADC12 Price Fluctuates at Highs in the Short Term

[SMM Analysis]Cost-Driven ADC12 Aluminum Alloy Rally Continues, High-Level Scrap Aluminum Game Warns of Correction

[SMM Cast Aluminum Alloy Morning Comment: The Most-Traded Contract Fluctuated and Closed Lower, Tight Aluminum Scrap Supply Supports Costs] In December, supply is unlikely to increase significantly due to raw material constraints, and low industry inventory provides a floor for prices. Overall, ADC12 prices have limited downside room, but a breakthrough to the upside depends on further cost-side increases or stronger-than-expected demand release. Prices are expected to fluctuate narrowly at highs in the short term, with close attention on the progress of aluminum scrap supply improvements, actual policy implementation, and changes in downstream enterprises' procurement pace.

[SMM Cast Aluminum Alloy Morning Comment: Aluminum Price Surge in December Drives Up Aluminum Scrap Prices, Intensifying Supply-Demand Tug-of-War in Cast Aluminum Alloy] On Monday, aluminum prices rose sharply, with the SMM A00 aluminum spot price reported at 21,730 yuan/mt, a single-day increase of 280 yuan/mt. The ADC12 price also increased by 150 yuan/mt to 21,500 yuan/mt. Concurrently, as copper prices approached the 90,000 yuan mark, aluminum scrap, especially aluminum tense scrap, followed the upward trend noticeably, significantly raising costs. Additionally, the premium for alloy varieties with higher copper content, such as A380, over ADC12 further widened. The rapid price surge currently dampens downstream cargo pick-up willingness, but year-end demand from end-users pushing for annual targets continues to support orders for secondary aluminum enterprises. Overall, the ongoing release of front-loaded order effects driven by year-end demand pushes and policy incentives, combined with strong support from high raw material costs, suggests that secondary aluminum alloy prices are expected to hold up well in the short term, highlighting overall price resilience.

[SMM Analysis]Prices of Secondary Aluminum Alloy Stop Falling and Stabilize, Supported by Both Costs and Demand

[SMM Cast Aluminum Alloy Morning Comment: Aluminum Scrap Prices Limited Downside, Cast Aluminum Alloy Prices Remain Under Pressure] Affected by macro headwinds, the nonferrous sector was generally under pressure. The SMM A00 aluminum spot price plunged 190 yuan/mt to 21,380 yuan/mt, while the ADC12 price dropped 100 yuan/mt to 21,350 yuan/mt, narrowing the inversion gap with the A00 aluminum price. This week, aluminum scrap prices pulled back overall along with aluminum prices, driving down ADC12 raw material costs. However, tight supply limited the downside, and some traders' reluctance to sell put purchasing pressure on secondary aluminum plants, supporting ADC12's resistance to declines. Overall, ADC12 prices have limited downside room due to cost and supply support, but the recent decline in aluminum prices and cautious demand are suppressing rebound momentum. In the short term, prices are expected to move sideways within the 21,200-21,500 yuan/mt range.

[SMM Analysis]Primary aluminum pulled back, driving down aluminum scrap prices, while tight supply supports high-level negotiations for next week.

[SMM Analysis]ADC12 Aluminum Alloy Price Hits Yearly High, Aluminum Scrap Cost Exceeds 90%

[SMM Cast Aluminum Alloy Morning Comment: Cast Aluminum Alloy Most-Traded Contract Fluctuated and Closed Lower Overnight, Tight Aluminum Scrap Supply Supports Spot Quotations to Hold Steady] On Monday, aluminum prices edged down, while the secondary aluminum market held steady in a wait-and-see mode. The ADC12 price held firm at 21,350 yuan/mt, with enterprises showing weak willingness to adjust prices. Currently, the tight supply of aluminum scrap persists, coupled with auxiliary materials such as copper fluctuating at highs, providing strong support on the cost side. In the short term, ADC12 prices still have upward momentum. Although end-use consumption resilience provides a cushion on the demand side, aluminum prices remain high, leading to cautious procurement among downstream enterprises. In the near term, ADC12 prices are expected to hold up well. Market participants should closely monitor improvements in aluminum scrap supply, the implementation effects of relevant policies, and changes in the procurement pace of downstream enterprises.