7.30
According to SMM statistics, on July 30, aluminum billet inventory in major consuming regions in China stood at 119,500 mt, down 2,500 mt from last Monday and down 1,500 mt from last Thursday. The inventory ended its two-week buildup trend and shifted to slight destocking. On a YoY comparison basis, inventory was 27,500 mt lower than the same period in 2025, 9,700 mt lower than in 2024, but 40,600 mt higher than in 2023. The total inventory remained at a relatively low level compared to the same periods over the past five years. From the warehouse withdrawal perspective, during July 21-27, aluminum billet warehouse withdrawals registered 35,500 mt, up 2,500 mt WoW, with marginal improvement in market transaction activity. The current aluminum billet inventory ceased its buildup and began to decline, mainly due to limited warehouse arrivals. In Foshan, the arrival pace slowed, with inventory flat at 53,500 mt, halting the earlier buildup trend. In Wuxi and Nanchang, destocking of 2,000 mt and 500 mt, respectively, was driven by downstream just-in-time procurement. Inventory in Changzhou and Huzhou remained unchanged. On the demand side, although wait-and-see sentiment emerged due to the aluminum price rebound, downstream just-in-time procurement still provided fundamental support, leading to a slight rebound in warehouse withdrawals. Given the current landscape of slowing supply-side arrivals and stable demand-side just-in-time procurement, aluminum billet inventory is expected to continue its slight destocking next week. However, constrained by limited demand growth, the destocking room is not large. With subsequent increase in arrivals, the inventory is likely to shift back to a buildup pace. Attention should be paid to downstream operating rate changes and arrivals across regions.
During the week, aluminum prices rebounded more than expected. The SMM A00 spot aluminum price rose from 23,260 yuan/mt last Thursday to 23,630 yuan/mt, accumulating a gain of around 370 yuan/mt. The strong rebound in aluminum prices, coupled with weakening demand, caused aluminum billet processing fees across regions to fall sharply under pressure. By region, in Foshan, processing fees for φ90 aluminum billet were quoted at 230 yuan/mt, and φ120 at 180 yuan/mt, both down 120 yuan/mt from last Thursday, a notable decline. In Wuxi, φ90 billet was reported at 400 yuan/mt, and φ120 at 280 yuan/mt, down 150 yuan/mt from last Thursday, the largest drop. In Nanchang, φ90 billet was quoted at 350 yuan/mt, and φ120 at 300 yuan/mt, down 70 yuan/mt from last Thursday. The widespread decline in processing fees during the week was mainly due to three factors: First, aluminum prices rebounded beyond 23,600 yuan/mt, leading to reduced downstream acceptance of high-priced billets and strong wait-and-see sentiment in procurement. Second, demand weakened due to aluminum price fluctuations, with downstream purchase willingness not strong. Third, earlier price-holding factors eased, and producers’ willingness to sell increased. Next week, aluminum billet processing fees are expected to remain in the doldrums, given stabilizing aluminum prices and no significant improvement in demand. Attention should be paid to whether aluminum prices stabilize and changes in downstream procurement pace.
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