[SMM Aluminum Spot Midday Review: Price Spread Between Futures Contracts Narrowed Significantly Compared to Last Friday, Spot Market Transactions Dominated by Discounts Due to Fear of High Prices] Inventory side, according to SMM's domestic aluminum ingot inventory data, domestic aluminum ingot inventory stood at 458,000 mt on June 16, with a destocking of 0.2 mt compared to the previous trading day. In the short term, the lower arrival of aluminum ingots and the reduction in inventory are conducive to high premiums in the spot market. In addition, the high premiums in east China and the Shanghai-Guangdong price spread attract cargo from south China to be transported to east China by water, but due to the long transportation cycle and limited volume, the impact on the market is limited.

[SMM Morning Comment on Cast Aluminum Alloy: Cost Support Combined with Off-Season Demand Leads to Narrow Adjustment in Short-Term ADC12 Prices] On Thursday, the SMM A00 aluminum price rose by 250 yuan/mt from the previous trading day to 20,650 yuan/mt. Domestic SMM ADC12 prices increased by 100 yuan/mt to the range of 19,900-20,100 yuan/mt. On the cost side, aluminum scrap prices closely followed the rise in aluminum prices during the week, causing the production costs of secondary aluminum enterprises to continue climbing and exacerbating pressure on the cost side. However, the downstream consumer market performed sluggishly, with insufficient procurement enthusiasm.

[SMM Aluminum Morning Meeting Summary: Continuous Destocking Strengthens Support, Aluminum Price Trend to Remain Strong] Macro side, as trade tensions ease, US consumer confidence has improved for the first time in six months, and pessimism over soaring underlying inflation has also significantly eased. The rebound in China's manufacturing PMI and improvement in export indicators in May have provided demand support, with the resilience of the domestic economy remaining. Fundamentals side, the operating capacity of domestic primary aluminum has remained stable, with a decrease in casting ingot volume prompting domestic aluminum ingot inventory to continue destocking. Cost side, prices of alumina and auxiliary materials are expected to weaken, reducing cost support for primary aluminum. Demand side, it is facing dual pressures from domestic seasonal weakness and trade uncertainties, with the operating rate of domestic aluminum processing enterprises expected to be under pressure in the short term. Overall, the current low inventory and the expectation of a higher proportion of liquid aluminum provide strong support for aluminum prices. However, the off-season pressure on the demand side limits upside room. Spot aluminum ingots in major consumption areas may soon face a situation of weak supply and demand, with aluminum prices expected to hold up well in the short term.

[SMM Analysis]According to the SMM survey, the operating rate of the secondary aluminum industry in May 2025 declined by 0.8 percentage points MoM to 41.3%, and fell by 2.7% YoY.

[Daily Commentary on ADC12 Prices: Costs Rise, Secondary Aluminum Alloy Prices Increase Again] Today, the SMM A00 aluminum price rose by 80 yuan/mt from the previous trading day to 20,730 yuan/mt. The domestic SMM ADC12 price increased by 50 yuan/mt to the range of 19,900-20,200 yuan/mt. Market quotes today showed slight divergence.