Overnight, LME copper opened at $9,643.5/mt, dipping to a low of $9,615.0/mt and peaking at $9,697.0/mt, before closing at $9,694.5/mt, up 0.35%.

[SMM Morning Comment on Cast Aluminum Alloy: The most-traded cast aluminum alloy contract rose slightly by 0.13% overnight, with the tug-of-war between cost and off-season demand continuing] Aluminum prices continued to decline slightly yesterday, with the SMM ADC12 price falling by 50 yuan/mt to 19,900-20,100 yuan/mt. Market quotes were slightly differentiated, with some enterprises slightly lowering their quotes due to weak demand, while others maintained firm quotes supported by cost pressure.

[SMM Aluminum Morning Meeting Summary: Reduced Probability of Short-Term Conflict Escalation in the Middle East, Inventory Inflection Point Becomes Key to Aluminum Market Direction] On the macro front, the probability of short-term conflict spreading in the Middle East has decreased, and the premiums previously driven by risk-averse sentiment may pull back. On the fundamental front, domestic operating capacity of electrolytic aluminum has remained stable, with the proportion of liquid aluminum staying at highs, and the market supply of casting ingots remains tight. On the demand side, overall, most downstream sectors are in a traditional off-season state. Feedback on production cuts in downstream sectors in central China is evident, with weak spot cargo transactions and significant discounts in market transaction prices. The weakening off-season demand in PV and home appliance sectors cannot be ignored, with a noticeable pullback in the operating rates of related sectors. The operating rate in the wire and cable sector has also declined due to the completion of the previous delivery cycle and high aluminum prices. In terms of inventory, the rate of destocking has slowed, and low inventory levels still provide support to the futures market. On Monday this week, inventory buildup was observed, and it is necessary to observe whether the inflection point of destocking has officially formed. However, spot premiums/discounts have gradually pulled back. In summary, in the short term, supported by expectations for US Fed interest rate cuts and low inventory levels, aluminum prices may fluctuate at highs. However, under the pressure of easing geopolitical risks and inventory buildup on the fundamental front, the upside room is relatively limited. Spot premiums/discounts may fall back from highs, and subsequent focus should be on changes in inventory and demand.

Net Primary Aluminum Imports: In May 2025, domestic net primary aluminum imports were 190,700 mt, down 19.5% MoM and up 26.3% YoY. From January to May, cumulative domestic net primary aluminum imports were approximately 990,500 mt, down 8.0% YoY. (The above import and export data are based on HS codes 76011090 and 76011010.)

[SMM Analysis: Net Imports of Primary Aluminum Plummeted Nearly 20% MoM in May, Weakening Actual Transactions During Off-Season Demand] In May 2025, China's net imports of primary aluminum reached 190,700 mt, down 19.5% MoM and up 26.3% YoY. From January to May, the cumulative net imports of primary aluminum in China amounted to approximately 990,500 mt, down 8.0% YoY. (The above import and export data are based on HS codes 76011090 and 76011010.)

Rising tensions in the Strait of Hormuz have pushed aluminium prices higher and fueled short-term market volatility, but a full and sustained blockade remains unlikely given historical precedent and strong military deterrence. The main impact on the aluminium sector is expected to be regional supply disruptions and premium divergence, rather than a prolonged global crisis.

According to SMM statistics, as of June 23, the inventory of aluminum ingots at major domestic consumption hubs stood at 464,000 mt, an increase of 15,000 mt from last Thursday and an increase of 6,000 mt from last Monday on a WoW basis. In terms of outflows from warehouses, the weekly outflows of aluminum ingots at major domestic consumption hubs over the past week reached 108,800 mt, a decrease of 11,500 mt WoW. Although domestic aluminum ingot inventory was just shy of the year's low of 440,000 mt last Thursday...

According to SMM statistics, as of June 23, the inventory of aluminum billets in major domestic consumption areas stood at 134,500 mt, an increase of 10,000 mt from Thursday and 13,000 mt WoW from Monday. Today, there were initial signs of inventory buildup for aluminum ingots, with the spot market focusing more on selling. Spot prices in east China continued to face downward pressure and pulled back. Recently, the aluminum billet market has been affected by high aluminum prices coupled with weakening downstream rigid demand, leading the aluminum billet inventory to enter an incremental phase and officially forming an inventory inflection point. Today, downstream players remained on the sidelines, and market quotes were divergent. However, due to the decline in aluminum prices, the overall processing fee quotes for aluminum billets in the three major domestic regions have recovered somewhat, but market feedback still indicated mediocre transaction performance. As of June 23, 2025, the aluminum billet market in Foshan reported quotes of 80/130 yuan/mt, unchanged; in Wuxi, the processing fees for aluminum billets were quoted at 120/160 yuan/mt, up 50 yuan/mt; and in Nanchang, the processing fees were quoted at 50/100 yuan/mt, up 50 yuan/mt. (Unit: yuan/mt)