Spot-futures price spread daily report: According to SMM data, on August 22, the theoretical premium of the SMM ADC12 spot price over the most-traded AD2511 contract's closing price at 10:15 AM was RMB 260 per tonne.
Aluminium scrap: On Friday, the spot price of primary aluminium rose by RMB 30 per tonne compared to the previous trading day, with SMM A00 spot closing at 20,710 per tonne. Baled UBC prices increased by 100 per tonne W-o-W, while shredded aluminium tense scrap (priced based on aluminium content) and wheel hubs (both car and motorcycle) remained unchanged W-o-W. It is expected that the aluminium scrap market will continue to fluctuate at highs this week. The supply of shredded aluminium tense scrap (priced based on aluminium content) is becoming tighter, with prices expected to fluctuate between RMB 17,100-17,600 per tonne (excluding tax). Baled UBC, supported by downstream can stock and other scrap utilisation enterprises, is expected to trade within the range of RMB 15,500-16,000 per tonne (excluding tax).
Recently, many regions have initiated special clean-up work for irregular tax rebates, which has caused widespread shock in the secondary aluminium market. Currently, the market is in a transitional phase of observation, and after the relevant policies are implemented, some downstream secondary aluminium producers may face pressure due to rising tax costs. To offset these costs, companies may lower raw material procurement prices, increasing the pressure on domestic aluminium scrap prices. However, from the supply side, the short-term supply of aluminium scrap will remain tight, giving suppliers a certain degree of pricing power. Overall, SMM believes that aluminium scrap prices will be under pressure, entering a stage of bargaining between sellers and buyers.
