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

[ADC12 Price Daily Review: Costs Drive ADC12 Prices Higher, Demand-Side Support Limited] Today, ADC12 market quotations were raised by 100 yuan/mt overall. Driven by the synchronous rise in aluminum prices and futures, aluminum scrap procurement costs further increased. The cost side provided strong support for ADC12 prices, and most enterprises chose to raise their quotations accordingly to pass on the cost pressure.

[US-Iran Conflict Renews Disruption to Commodities; Geopolitical Premium Boosts SHFE Aluminum to Surge with Heavy Volume] Overall, the persistent Middle East geopolitical risk premium, combined with continued destocking of domestic aluminum ingots, jointly underpins aluminum prices; however, the continuous launch of overseas aluminum forward capacity, weak traditional end-use demand in China, along with repeated shifts in overseas expectations for US Fed interest rate hikes and uncertainties in the Middle East geopolitical situation, exert notable pressure on the upside room for aluminum prices. In the short term, aluminum prices maintain a consolidation pattern.

[ADC12 Daily Price Review: Aluminum Alloy Most-Traded Contract Opens with a Plunge, Lacks Momentum for a Rebound, and Maintains a Sideways Tug-of-War] Under the dual effects of cost support and weak demand, the short-term ADC12 price is expected to continue to move sideways. The market is monitoring the subsequent recovery of end-use demand and changes in raw material prices.

[Aluminum Ingot Destocking Continues to Cement Bottom Support; Rate Hike Expectations and Off-Season Demand Constrain Rebound Room] Overall assessment: recently, macro front sentiment has improved slightly. The persistent Middle East geopolitical risk premium and China's continued destocking of aluminum ingots have jointly underpinned the aluminum price movement. However, the ongoing deployment of future aluminum capacity outside China, weak traditional end-use demand in China, and recurring uncertainties from the macro perspective have imposed significant pressure on the upside room for aluminum prices. In the short term, aluminum prices are expected to maintain a consolidation pattern.

[SMM Aluminum Alloy Daily Review] Today, ADC12 market offers remained generally stable. Currently, compliant aluminum scrap supply remained tight, and procurement costs stayed high, providing support for ADC12 prices; demand side, as the traditional off-season further deepens, some downstream enterprises were gradually entering their high-temperature holidays, and order reductions led to a further weakening of procurement enthusiasm. In the short term, the ADC12 market is expected to continue moving sideways within a narrow range, with a cautious and wait-and-see pattern.