Spot-Futures Price Spread Report: According to SMM data, the spot price of SMM ADC12 showed a theoretical premium of RMB 495 per tonne against the closing price of the most-traded cast aluminium alloy contract (AD2511) at 10:15 am on August 29, with the spread widening.
Aluminium scrap: Spot primary aluminium prices fell MoM on Monday, with SMM A00 spot aluminium closing at RMB 20,620 per tonne, while aluminium scrap prices followed the downtrend. As the traditional peak season approaches, orders at some downstream scrap utilisation enterprises recovered. However, tight supply remained the dominant theme in the scrap market, keeping purchasing prices elevated and generally tracking aluminium price movements.
Baled UBC and shredded aluminium tense scrap (priced based on aluminium content) dropped RMB 100 per tonne W-o-W. Jiangxi saw significant adjustments in scrap aluminium offers yesterday, with aluminium tense scrap down RMB 100 per tonne and wrought aluminium alloy scrap down 200-300 per tonne, indicating initial policy impact.
SMM expects aluminium scrap prices to hover at highs this week amid intensifying tug-of-war between sellers and buyers. From a macro perspective, the ongoing nationwide crackdown on irregular tax rebates will profoundly reshape the cost structure of the secondary aluminium industry. During the policy transition period, downstream scrap users may further bargain down purchasing prices to offset potential tax cost increases, exacerbating downside risks for scrap prices. Nevertheless, tight supply conditions are unlikely to ease in the short term, particularly for shredded aluminium tense scrap, which will continue to bolster suppliers' pricing power.
