ADC12 weekly increase exceeds RMB 1,200 per tonne, market competition intensifies amid caution over correction risks
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Update time : 2026-01-12 14:16:13
Secondary aluminium raw materials: This week, domestic aluminium scrap prices followed primary aluminium's sharp rally, with the price centre rising significantly. As of January 8, the SMM A00 aluminium price closed at RMB 24,000 per tonne, up RMB 1,540 per tonne from before the holiday. Major categories of aluminium scrap moved in sync, with baled UBC trading in the range of RMB 17,700-18,100 per tonne (ex-tax) and shredded aluminium tense scrap (water price) at RMB 19,300-19,800 per tonne (ex-tax), up RMB 800-1,400 per tonne cumulatively over the week. Regional price adjustments diverged, with Shanghai, Zhejiang, and Shandong seeing the largest cumulative gains, while increases in Guizhou, Henan, and Hunan were relatively modest. Supply side, environmental protection-driven production restrictions in central China were lifted, but inventory levels for wrought aluminium scrap remained saturated. Demand side, the "price without market" characteristic became prominent, as downstream users strongly resisted high prices, purchasing as needed or digesting inventories. Some enterprises planned early shutdowns, and Chinese New Year stocking expectations weakened. For the price difference between primary metal and scrap, Foshan aluminium for profiles closed at RMB 3,766 per tonne, and shredded aluminium tense scrap closed at RMB 2,691 per tonne. Aluminium scrap market is expected to hover at highs next week, with shredded aluminium tense scrap (water price) projected in the main range of RMB 18,800-19,200 per tonne (ex-tax). High primary aluminium prices will provide bottom support for scrap, but poor cost transmission along the industry chain will limit upside room. Inventory pressure on the supply side and the fragmented scrap sourcing landscape are unlikely to change significantly in the short term. Downstream suppression is intensifying; as the Chinese New Year approaches, enterprises are gradually entering holiday shutdowns. The operating rate of secondary aluminium producers will decline further, downstream production cuts and shutdowns will expand, and stocking demand is unlikely to provide effective support. Overall, the tug-of-war between sellers and buyers continues. Close attention should be paid to primary aluminium trends, downstream shutdown progress, and pre-holiday transaction activity, while remaining vigilant against high-price correction risks.
