Aluminum ADC12 Import Prices Drop, Domestic-Ex-China Gap Narrows to 2,300 Yuan/mt

[SMM Aluminum Bulletin] Looking ahead, the continued release of new aluminum capacity in Southeast Asia and Northern Europe is expected to be the primary driver boosting anode export growth. May exports experienced a temporary pullback due to shifts in Southeast Asian procurement pace and declining demand from the Middle East, but the offsetting effect of new Southeast Asian capacity should not be overlooked. The probability of a near-term recovery in markets like the Middle East and Russia remains low, and exports are likely to fluctuate at lows. Overall, cumulative exports for the full year are still expected to maintain slight positive growth.

[SMM Aluminum Bulletin] Concentrated maintenance-driven production cuts at multiple overseas refineries and persistently rising ocean freight rates jointly tightened the supply of spot coke outside China significantly. This drove up external purchase costs for traders sharply and prompted domestic buyers to proactively slow down their procurement pace, directly causing a sharp pullback in May port arrivals and synchronous price spikes. At this stage, the maintenance cycle at major overseas refineries has yet to conclude, making the strong overseas spot market difficult to reverse in the short term. Import costs for China are likely to fluctuate at highs. SMM forecasts that petroleum coke port arrivals may see a slight recovery in June but will struggle to return to previous highs.

[SMM Aluminum Bulletin] This week, the operating rate of leading aluminum downstream processing enterprises in China recorded 63%, down 0.4 percentage points MoM. Dragged down by the deepening off-season effect, downstream purchase willingness was generally subdued, and operations across most segments remained under pressure.