[Scrap Aluminum and Secondary Aluminum Weekly Review: Cost-Driven Price Strengthening, High-Temperature Holiday Drags Demand, ADC12 Gains Constrained] This week, ADC12 market prices first stabilized and then rose. SMM ADC12 prices held steady at 24,000 yuan/mt early in the week, were raised for two consecutive days mid-week driven by costs, and stood at 24,200 yuan/mt as of Thursday, up 200 yuan/mt from last Thursday. The cost side remained the core driver of this week's price increase.

The SEA secondary aluminum market remained mixed this week. Aluminum scrap prices were largely stable, while ADC12 remained under pressure due to weak downstream demand. Buying activity stayed cautious, although UBC scrap held firm on tighter supply and steady recycling demand. Market attention also shifted to the EU's Carbon Border Adjustment Mechanism (CBAM), with growing focus on carbon reporting, recycled content, and supply chain traceability as compliance requirements continue to evolve.

[Marginal Easing in Expectations for US Fed Rate Hikes, Continued Aluminum Destocking Underpins Market] Based on a comprehensive assessment, the macro front has improved recently; marginal constraints from rate hike expectations on the nonferrous metals sector continue to ease; the proportion of liquid aluminum in China keeps rising; the Middle East geopolitical risk premium continues to accumulate, while aluminum ingot destocking continues in China, collectively underpinning aluminum prices; and market confidence has strengthened markedly in the short term. However, the continuous rollout of long-term aluminum capacity outside China, weak traditional end-use demand in China, coupled with recurring expectations for US Fed rate hikes overseas and disturbances from uncertainties in the Middle East geopolitical situation, still exert some pressure on the upside room for aluminum prices. In the short term, aluminum prices consolidate on a strong note.

[ADC12 Price Daily Review: Aluminum Alloy Futures Shot Up, Came Under Pressure and Pulled Back; Spot Aluminum Followed Suit with Sluggish Trading] The aluminum alloy 2609 contract opened at 23,140 yuan/mt today, with an intraday high of 23,290 yuan/mt and a low of 23,055 yuan/mt.

[Disturbances from Expectations for US Fed Interest Rate Hikes Combined with Continuous Destocking of China’s Social Inventory; Aluminum Prices to Maintain Consolidation Pattern in the Short Term] Overall, the continuous geopolitical risk premium in the Middle East, combined with continuous destocking of domestic aluminum ingots, jointly underpins aluminum prices. However, the continuous commissioning of long-term aluminum capacity outside China, weak traditional end-use demand in China, together with disturbances from recurrent overseas expectations for US Fed interest rate hikes and uncertainty in the Middle East geopolitical situation, exert significant pressure on the upside room for aluminum prices. In the short term, aluminum prices are expected to maintain a consolidation pattern.

[SMM Cast Aluminum Alloy Morning Comment: Rising Aluminum Scrap Costs Support ADC12 Uptrend, End-user Off-season Caps Market Upside] Overnight, the most-traded aluminum alloy 2609 futures contract closed at 23,100 yuan/mt, flat