China's Secondary Aluminum Ingot Inventory Down by 171 mt, Led by Foshan and Ningbo Destocking

Today, trading sentiment in the central China market was mediocre. Monday happened to be the first day for cargoes with invoices dated next month. Downstream processing enterprises' buying sentiment was not high, with only a few enterprises maintaining rigid demand and making small purchases. Suppliers were not strongly willing to hold prices firm, and quotes showed a downward trend. Meanwhile, transactions for cargoes with invoices dated this month were relatively active, with traders short of such invoices trading a large volume of them. However, against the backdrop of an overall shortage of such invoices in the market, quotes stayed high. Finally, the actual transaction price range for cargoes with invoices dated next month in the central China market settled around a discount of 100-120 yuan/mt against the SHFE aluminum August contract.

On July 24 local time, in response to the latest US tariff measures, the Association of German Chambers of Commerce and Industry and the German Wholesale and Foreign Trade Association each issued statements, criticizing the frequent changes in US tariff policies, which create greater uncertainty for enterprise operations and investment. Treier Volker, director of foreign trade at the Association of German Chambers of Commerce and Industry, pointed out that the US is attempting to revive tariff measures previously blocked by courts on new legal grounds. Such constant policy shifts not only increase the administrative burden on enterprises, but also heighten legal risks, making it difficult for enterprises to operate in a stable and predictable environment. He stressed that US tariff measures that violate WTO rules must be abolished entirely, especially the additional tariffs still in effect on steel and aluminum products.

[End-Use Demand Weakness Limits Rise, Aluminum Price Consolidation Pattern Continues] Our comprehensive outlook indicates that recent macro sentiment has improved slightly, with the persistent Middle East geopolitical risk premium and continued destocking of aluminum ingots in China jointly underpinning aluminum prices. However, long-term capacity additions in aluminum production outside China, weak traditional end-use demand in China, and recurring uncertainty at the macro level are creating significant pressure on the upside room for aluminum prices, which are expected to maintain a fluctuating trend in the short term.