Firstly molten aluminium can be any temperature above its melting point. So if you heat up aluminium to over the melting point of iron it is still going to be molten. But you do not even have to heat it that much. When you put the iron into the molten aluminium the surface of the iron will react with the aluminium and form an aluminium-iron alloy. And this alloy might have a melting point bellow the temperature in the crucible and will therefore melt. This will then expose more iron to the molten aluminium and the process continues.
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