[SMM Analysis]The operating rate of secondary aluminum producers rose against the trend in July, but may pull back in August due to weak demand

Futures: Overnight, LME copper opened at $9,768.5/mt, touched a low of $9,747.5/mt at the beginning of the session, then fluctuated upward throughout the day, nearing a high of $9,865/mt before closing at $9,840/mt, up 1.17%.

[SMM Aluminum Morning Meeting Summary: US CPI Data Boosts Macro Sentiment, While Weak Consumption and Inventory Buildup Act as Pressing Factors] In terms of macro, the US July CPI data and related market reactions, mainly through the weakening of the US dollar triggered by interest rate cut expectations and the impact on production costs, have exerted a certain upward push on aluminum prices. From the fundamental perspective, changes in terms of supply have been relatively small, with the operating production of electrolytic aluminum showing a steady and slight increase. On the cost side, the total weekly cost of the electrolytic aluminum industry is 16,738 yuan/mt, with minimal changes, and the industry's high profits persist. Focusing on the demand side, under the influence of the off-season, consumption from terminals to processed materials remains weak. The growth rates of industries such as home appliances and PV, which had strong support in the early stage, have slowed down. Some export orders for aluminum terminals have also declined, and the construction industry is still experiencing a super-seasonal decline. Social inventory of electrolytic aluminum has already broken through the 550,000 mt threshold. Although uneven arrivals last week caused fluctuations in inventory data, under the off-season atmosphere, with aluminum prices at a high level, consumption may be further impaired, and the trend of continued inventory buildup in the short term remains unchanged. Overall, macro tailwinds combined with potential risks in electrolytic aluminum supply have pushed aluminum prices to a high level. However, during the consumption off-season, the pressure of inventory buildup remains significant. After the positive sentiment is digested, the center of aluminum prices will pull back, and the 21,000 yuan/mt threshold will still face pressure.

[SMM Morning Comment on Cast Aluminum Alloy: Domestic Secondary Aluminum Prices Remain Steady, Watchful; Imported Spot Cargo Continues to Operate at a Loss] On Tuesday, aluminum prices rebounded slightly, with secondary aluminum market quotes remaining steady and watchful. The SMM ADC12 price stabilized at 20,250 yuan/mt. In August, the secondary aluminum market remained constrained by tight aluminum scrap supply, with enterprises facing continuous cost pressure, supporting the price of ADC12. However, consumption has not shown significant improvement, which will limit the upside potential for price increases. It is expected that secondary aluminum alloy prices will fluctuate rangebound at the beginning of the month. In the short term, close attention should be paid to the progress of end-use demand recovery and the improvement of aluminum scrap supply.

According to SMM statistics, regarding the inventory of aluminum billets in two domestic locations, the inventory of aluminum billet in Guangdong was 57,000 mt, and the inventory of aluminum billet in Wuxi was 36,500 mt, totaling 93,500 mt, a decrease of 500 mt compared to the previous period. Today, influenced by the further extension of China-US tariffs, SHFE aluminum prices recovered from yesterday's decline and continued to trade within a range. Although the downstream extrusion market remained in an off-season atmosphere, due to the reduction in arrivals in regions affected by production cuts at billet plants, the aluminum billet inventory maintained a range-bound movement without showing a clear trend. As aluminum prices remained relatively stable, today's market processing fees were basically flat compared to yesterday. The downstream maintained a cautious purchasing pace, focusing primarily on immediate needs, and the sentiment for spot trades was relatively subdued. As of August 12, 2025, the aluminum billet market in Foshan reported processing fees of 210/260 yuan/mt, unchanged; the processing fees in Wuxi were quoted at 150/300 yuan/mt, unchanged; and the processing fees in Nanchang were reported at 220/280 yuan/mt, unchanged. (Unit: yuan/mt)

[SMM Morning Comment on Cast Aluminum Alloy: ADC12 Prices Remain Steady, Short-Term Focus on Demand and Aluminum Scrap Supply] On Monday, aluminum prices continued to experience a slight correction, with the quoted prices in the secondary aluminum market remaining steady and cautious. The SMM ADC12 price stabilized at 20,250 yuan/mt. In August, the secondary aluminum market continued to be constrained by tight aluminum scrap supply, with enterprises facing sustained cost pressure, supporting ADC12 prices. However, consumption has not shown significant improvement, which will limit the upside potential for price increases. It is expected that secondary aluminum alloy prices will fluctuate rangebound at the beginning of the month. In the short term, close attention should be paid to the progress of end-use demand recovery and the improvement of aluminum scrap supply.

[SMM Aluminum Morning Meeting Summary: Aluminum Prices Under Pressure at Highs, Awaiting CPI Data Guidance] On the macro front, US Fed officials are increasingly uneasy about the labour market, indicating their openness to an interest rate cut as early as September. Cooling inflation may solidify bets on a rate cut next month, but signs that President Trump's tariffs are fueling price increases could prompt the Fed to hold off for now. In terms of supply, there have been relatively small changes, with production of electrolytic aluminum remaining stable with a slight increase. On the cost side, the total weekly cost for the electrolytic aluminum industry is 16,738 yuan/mt, showing minimal change, and the industry's high profits persist. Focusing on demand, under the influence of the off-season, consumption from terminals to processed materials remains weak. The growth rates of industries such as home appliances and PV, which had strong support in the early stage, have slowed down. Some aluminum terminal export orders have also declined, and the construction industry continues to experience a super-seasonal decline. Social inventory of electrolytic aluminum has surpassed the 550,000 mt mark. Although last week's uneven arrivals caused fluctuations in inventory data, the high aluminum prices amid the off-season may further damage consumption, and the trend of inventory buildup is expected to continue in the short term. Overall, macro tailwinds combined with potential risks in electrolytic aluminum supply have driven aluminum prices to rebound to highs. However, during the consumption off-season, the pressure of inventory buildup remains significant. After the positive sentiment is digested, the center of aluminum prices will pull back somewhat, still facing pressure at the 21,000 yuan/mt mark. Similarly, most processed material enterprises have a relatively high recognition of prices below 20,500 yuan/mt, and their just-in-time procurement capabilities have been somewhat validated at this level.

[SMM Aluminum Morning Meeting Summary: Social Inventory of Aluminum Ingots Continues to Build Up, Aluminum Prices Under Pressure amid Off-Season Atmosphere] On the macro side, expectations for US Fed interest rate cuts have risen, and macro sentiment remains positive, providing a boost to base metals. The US has imposed a tariff hike on India, while India and Russia have signed a cooperation agreement to deepen cooperation in the aluminum sector, leading to a subtle rise in risk-averse sentiment among investors. In terms of fundamentals, there have been relatively small changes in supply, with the operating production of electrolytic aluminum showing a steady and slight increase. On the cost side, the total weekly cost for the electrolytic aluminum industry is 16,738 yuan/mt, with minimal changes, and the industry's high profits persist. Focusing on the key aspects, demand is currently weakening under the influence of the off-season, with consumption from terminals to processed materials remaining sluggish. The growth rates of industries that previously provided strong support, such as home appliances and PV, have slowed down. Some export orders for aluminum terminals have also declined, and the construction industry is still experiencing a super-seasonal decline. The social inventory of electrolytic aluminum has already surpassed the 550,000 mt threshold. Although last week's uneven arrivals caused fluctuations in inventory data, the high aluminum prices amid the off-season atmosphere may further damage consumption, and the trend of continued inventory buildup in the short term remains unchanged. Overall, the combination of positive macro factors and potential risks in electrolytic aluminum supply has driven aluminum prices to rebound to high levels. However, amid the off-season for consumption, the pressure from inventory buildup remains significant. After the positive sentiment is digested, the center of aluminum prices will pull back, and the 21,000 yuan/mt threshold will still be under pressure. Similarly, most processed material enterprises have a relatively high recognition of prices below 20,500 yuan/mt, and their just-in-time procurement capabilities have been validated to a certain extent at this price level.