Southeast Asia's aluminum scrap market rebounded this week, with key grades in Malaysia and Thailand rising, while ADC12 prices softened amid weak downstream demand. Despite lower LME aluminum prices, tight scrap supply kept offers firm. Sentiment improved slightly, but buying remained need-based. Attention also shifted to US Section 232 developments and their potential impact on trade flows and regional supply.

This week, the Southeast Asian secondary aluminum market overall remained in the doldrums, with aluminum scrap and ADC12 prices remaining under pressure. As LME aluminum prices continued to consolidate on a subdued note, downstream consumption recovery was slow, market purchases were still mainly for rigid demand, and the overall trading atmosphere was mediocre. Meanwhile, overseas quotes continued to pull back, which improved China’s import profitability from earlier levels. Some Southeast Asian resources flowed back into the Chinese market, but spot transactions still failed to show a significant increase in volume.

【SMM Analysis】Since the fourth quarter of 2025, the international aluminum market has experienced a significant unilateral upward trend. Driven by supply-side sentiment stemming from the official implementation of the EU's Carbon Border Adjustment Mechanism (CBAM), combined with the absence of a price correction during the traditional year-end off-season and global holiday disruptions, LME aluminum prices have demonstrated strong resilience and sustained momentum. According to SMM monitoring data, the LME aluminum cash settlement price soared from 2,683.5 USD/tonne on October 1, 2025, to 3,180 USD/tonne on January 9, 2026. In just one quarter, the price rose by 496.5 USD/tonne, a cumulative increase of 18.5%. The market generally predicts that this strong trend is unlikely to reverse in the short term and will likely persist until after the 2026 Lunar New Year (late February to mid-March 2026).