The current supply of scrap aluminum remains tight, with raw material costs providing strong support for the price of recycled aluminum alloys. On Monday, SMM ADC12 prices rose by 100 yuan/ton to 20,550 yuan/ton. Additionally, there have been reports from multiple regions about the cancellation of tax rebates and the imposition of additional taxes. In response to rising cost pressures, companies are increasingly inclined to raise prices, making short-term price increases more likely than decreases.
Market Overview: The overnight main contract for casting aluminum alloy (AD2511) opened at 20,320 yuan/ton, with a low of 20,260 yuan/ton and a high of 20,325 yuan/ton, closing at 20,305 yuan/ton, down 25 yuan/ton or 0.12% from the previous close. The trading volume was 645 lots, with an open interest of 8,126 lots, primarily driven by long positions reducing.
Basis Daily Report: According to SMM data, on August 25, the SMM ADC12 spot price was theoretically at a premium of 270 yuan/ton over the closing price of the main contract for casting aluminum alloy (AD2511) at 10:15 AM.
Regarding scrap aluminum: On Monday, the spot price of primary aluminum increased by 70 yuan/ton compared to the previous trading day, with SMM A00 spot closing at 20,780 yuan/ton, leading to an overall rise in scrap aluminum market prices. The price of packaged aluminum cans increased by 50 yuan/ton, while the prices for crushed primary aluminum (water price) and automotive and motorcycle wheel hubs remained stable. It is expected that the scrap aluminum market prices will continue to operate at high levels this week. The tight supply of crushed primary aluminum (water price) is expected to strengthen, with a trading range projected between 17,100 and 17,600 yuan/ton (excluding tax); the packaged aluminum cans are supported by downstream can material and other recycling enterprises, with a trading range of 15,500 to 16,000 yuan/ton (excluding tax).
In terms of industrial silicon: On August 25, the spot price of industrial silicon slightly increased compared to last Friday, with SMM East China 553# silicon priced between 9,200 and 9,500 yuan/ton, up 100 yuan/ton from last Friday, and 441# silicon priced between 9,500 and 9,700 yuan/ton, up 50 yuan/ton from last Friday. In the futures market, the main contract for industrial silicon (SI2511) opened at 8,930 yuan/ton, with a high of 8,940 yuan/ton, a low of 8,655 yuan/ton, and a closing price of 8,675 yuan/ton, up 5 yuan/ton from last Friday.
In the overseas market: Currently, the overseas price for ADC12 is in the range of 2,480 to 2,500 USD/ton. Due to the rise in domestic prices coupled with the appreciation of the RMB, the import loss has slightly narrowed to around 400 yuan/ton; the local ADC12 price in Thailand is temporarily quoted at 83-84 Thai Baht/kg, excluding tax.
Regarding inventory: According to SMM statistics, on August 26, the total social inventory of recycled aluminum alloy ingots in Foshan, Ningbo, and Wuxi was 32,373 tons, an increase of 405 tons from the previous trading day and an increase of 914 tons from the previous Tuesday (August 19).
Summary: The current supply of scrap aluminum remains tight, with raw material costs providing strong support for the price of recycled aluminum alloys. On Monday, SMM ADC12 prices rose by 100 yuan/ton to 20,550 yuan/ton. Additionally, there have been reports from multiple regions about the cancellation of tax rebates and the imposition of additional taxes. In response to rising cost pressures, companies are increasingly inclined to raise prices, making short-term price increases more likely than decreases. In terms of demand, as the traditional “golden September” peak season approaches, downstream purchasing sentiment is gradually recovering, but the recovery strength remains insufficient. In the short term, ADC12 prices are expected to maintain a strong oscillating pattern, driven by cost support and policy disturbances pushing prices upward, but insufficient demand may limit the upward space. If policy impacts deepen or peak season demand is released as expected, prices may break through the current range; conversely, if policy implementation is moderate and demand remains weak, prices may continue to consolidate at high levels. Future attention should focus on the progress of policy document implementation, the recovery of scrap aluminum supply, and the marginal improvement of terminal demand.
Source: Shanghai Nonferrous Metals Network (SMM)
