In September, domestic ADC12 aluminum alloy prices showed an overall volatile-but-firm trend. At the start of the month, the recycled aluminum alloy market extended the soft tone from late August; with aluminum prices fluctuating in a narrow range and costs staying elevated, producers held offers firmly, and ADC12 stabilized around Yuan 23,500-23,700/tonne. On the macro side, the Fed's rate-hike decision was finally delivered, removing the lingering uncertainty that had weighed on commodities, and sentiment in the die-casting aluminum alloy market improved, giving prices upward momentum.
At the same time, the "Golden September" peak demand season drove a mild recovery in downstream demand for aluminum, while inventories kept drawing down, reinforcing the floor under aluminum prices. With macro headwinds fading and fundamental support strengthening, SHFE aluminum traded firm in mid-September and the ADC12 price center shifted higher.
Another key catalyst for the accelerated rally came from a policy shock on the raw-material side. In mid-to-late September, some areas in Jiangxi tightened oversight of "reverse invoicing" for related enterprises and further cut invoicing quotas; meanwhile, Henan began verifying the authenticity of "reverse invoicing" for recycled-copper firms, with local recycled-aluminum companies likely to be brought into the check. Compliance-based procurement of aluminum scrap suddenly became much harder.
In China's recycled nonferrous metals chain, much of the collection segment is made up of individual collectors and scrap yards that normally cannot issue special VAT invoices themselves. To let downstream processors obtain compliant input invoices and claim tax credits, "reverse invoicing" allows qualifying buyers to issue invoices to those individual collectors. In recent years, regulators have stressed "real transactions, invoice-goods consistency, and traceable fund flows". Once localities tighten reverse-invoicing quotas or audit authenticity, compliant scrap becomes scarcer, procurement costs rise, ADC12's cost support strengthens, and some producers may be forced to cut output on feed shortages.
As a result, local firms faced higher and harder aluminum scrap procurement, sharply strengthening ADC12's cost backing. By September 18, spot ADC12 was quoted at Yuan 24,000/tonne, up Yuan 500/tonne from early-month levels. Amid the tug-of-war between high costs and weak demand, ADC12 found support near Yuan 24,000/tonne, with limited upside and downside room.
For September 2026, national die-casting aluminum alloy output followed a "first down, then up, then down" weekly pattern. Mysteel data show that as of September 30, output from 191 sampled enterprises was 122,200 tonnes/week, down 8,700 tonnes week on week. Early-month output fell as some large smelters shut furnaces for inventory check, cutting supply temporarily. In mid-September, peak-season orders rose, ADC12 prices moved higher, margins stayed acceptable, and operating rates recovered, lifting weekly output. But from mid-to-late September, tighter reverse-invoicing rules in Jiangxi and Henan raised tax-cost burdens; together with insufficient arrivals of VAT-included scrap, feed procurement was constrained and some plants cut or halted production, dragging national weekly output down again. Overall, September output was shaped by routine supply disruptions, peak-season demand improvement, and policy-plus-feed constraints, with month-end output clearly lower than the prior week.
According to the latest air-conditioner, refrigerator, and washing-machine production schedules from Industry Online, total October 2026 output plans for these three kinds of white goods have been 27.74 million units, up 0.5% from actual production a year earlier. By product: household air conditioners 10.28 million units, up 1.5% year on year, refrigerators 8.41 million units, up 1.7% year on year, and washing machines 9.05 million units, down 1.7% year on year.
In September, ADC12 inventory trends diverged. Traders' stocks first rose then fell, while plant inventories first fell then rose. For traders' stocks, tighter compliant VAT-invoice scrap supply and higher tax costs in Jiangxi and Henan pushed up recyclers' procurement costs; spot quotes proved relatively resistant to declines and held a premium to futures. Under that backwardation-like spot premium, arbitrage had an edge, and traders' stocks turned to draw down in late September.
Mysteel shows China ADC12 traders' stocks at 16,000 tonnes as of September 30, down 1,100 tonnes week on week. For plant inventories, early-month futures strength lifted trader buying and mill shipments, so plant stocks fell; but in mid-to-late September, as reverse-invoicing concerns spread and costs rose, some producers cut output and parked untaxed scrap as inventory to wait out policy, so plant stocks rebuilt late in the month. As of September 30, aluminum alloy ingot plant inventories rose to 68,700 tonnes, up 1,500 tonnes week on week.
For October, the ADC12 market is expected to hinge on the standoff between rigid scrap costs and the pace of peak-season demand fulfillment, with prices biased upward in a rangebound mode. Mysteel sees the most-traded SHFE contract roughly at Yuan 23,500-24,500/tonne. As of October 14, the core conflict remains the tug-of-war between shrinking compliant scrap supply and insufficient downstream demand elasticity; with mixed bullish and bearish factors, upside and downside are both capped.
On the supply side, operating rates in recycled aluminum alloys stay low and could fall further. Tighter reverse-invoicing rules and scarce compliant scrap have kept capacity curtailments unresolved, leaving supply elasticity constrained. That said, if the import window opens wider, overseas material could marginally ease domestic tightness--actual arrival timing still needs tracking.
On the demand side, October is a seasonal peak, but die-casters resist high raw-material prices and buy mainly on rigid need with small, fast-turn orders; there is little appetite for prolonged or large stockpiling, so a concentrated restock-driven rally is unlikely and upside is clearly capped.
In sum, October's ADC12 fundamentals show "strong cost support, weak supply elasticity, slow demand repair." Costs are easy to rise and hard to fall, providing a floor, while a sub-par peak season caps price elasticity. ADC12 is expected to hold a volatile-but-firm trend.
Written by Regina WANG
wangjiaqie@mysteel.com
