The production of casting ingots increased in some regions in late June. In July, the high downstream inventory forced the proportion of liquid aluminum to pull back [SMM data]

Published: Jun 30, 2025 18:13

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[SMM Data: Increased Casting Ingot Production in Some Regions in Late June; High Downstream Inventory in July Forces Proportion of Liquid Aluminum to Pull Back] SMM reported on June 30: According to SMM statistics, domestic primary aluminum production in June 2025 (30 days) increased by 1.57% YoY and decreased by 3.23% MoM. In June, the operating capacity of domestic primary aluminum smelters saw a slight MoM fluctuation. SMM learned that at month-end, the second-phase replacement of primary aluminum production in Shandong-Yunnan began, requiring the original plant to cut production and pass acceptance inspections before restarting pots at the new plant. The proportion of liquid aluminum in domestic primary aluminum smelters continued to rise in June, with the industry's proportion of liquid aluminum increasing by 0.1 percentage points MoM to 75.8%. The increase was smaller than expected at the beginning of the month, mainly due to the current high inventory of downstream alloy products and increased casting ingot production at aluminum smelters in some regions. It is expected that the proportion of liquid aluminum will show a downward trend in July. Based on SMM's data on the proportion of liquid aluminum, the domestic primary aluminum casting ingot production in June decreased by 12.77% YoY to approximately 872,500 mt.

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SMM June 30 News:

According to SMM statistics, China's aluminum production in June 2025 (30 days) increased 1.57% YoY but decreased 3.23% MoM. Domestic operating capacity saw minor fluctuations MoM. SMM learned that the second-phase capacity replacement project in Shandong-Yunnan started at month-end, requiring the original smelter to cut production and pass inspection before restarting pots at the new plant. The proportion of liquid aluminum at domestic smelters continued rising, up 0.1 percentage points MoM to 75.8%, with growth slower than early-month expectations due to high alloy inventory downstream and increased casting at some smelters. The liquid aluminum ratio is expected to pull back in July. Based on SMM data, cast ingot volume fell 12.77% YoY to around 872,500 mt.

Capacity Changes:By end-June, SMM estimated China's existing aluminum capacity at approximately 45.69 million mt (SMM adjusted the figure in late April by eliminating double-counted capacity after considering replacement projects and old plant demolitions), with operating capacity around 43.83 million mt. The operating rate dipped slightly MoM due to capacity replacements. The Shandong-Yunnan project requires the original smelter to cut production and pass inspection before restarting pots at the new facility. SMM will continue tracking aluminum capacity changes.

Production Forecast:In July 2025, domestic operating capacity will remain high as Yunnan's second-phase replacement project commences operation, boosting the industry operating rate. Other projects show no progress. On liquid aluminum ratio, weakening end-use demand and evident alloy inventory buildup prompted production cuts in Qinghai and central China, forcing smelters to increase casting. The ratio may pull back to around 74%. Future attention should focus on liquid aluminum ratio trends alongside alloy inventory and demand.

Data Source: SMM

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Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

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