[SMM Aluminum Morning Meeting Summary: Macro Trade Friction Risks Intensify, A00 Social Inventory Remains Stable During the Week] Summary: On the macro front, Trump's imposition of a 25% tariff (total tariff rate of 50%) on India has intensified trade friction risks, which will curb the transmission of global industrial chain demand and weaken expectations for aluminum semis exports. Expectations for US Fed interest rate cuts have heated up (with two potential cuts this year), putting pressure on the US dollar and providing bottom support for commodities. On the fundamental front, supply side, domestic operating aluminum capacity remains stable, the proportion of liquid aluminum has pulled back, and the increase in casting ingot volume, i.e., the increase in market-circulating supplies, combined with continuous inventory buildup in social inventory, has suppressed the upward movement of aluminum prices. Demand side, the off-season atmosphere persists downstream, with spot purchasing as needed, and spot premiums struggling to rise. The PV, NEV, and home appliance sectors are still in the off-season. Despite the decline in aluminum prices, there has been no significant improvement trend in orders on hand for processing plants. In the short term, spot premiums and discounts are in the doldrums, and it is expected to maintain a pressure-bearing operation pattern. However, with the heating up of macro easing expectations, after the end of the seasonal off-season and the transmission of policy implementation, aluminum prices still have rebound momentum. Whether subsequent prices can break through will depend on observing the inventory trend and consumption recovery signals during the transition from the off-season to the peak season in August.

[SMM Morning Comment on Cast Aluminum Alloy: Cost Support for Cast Aluminum Alloy Becomes Prominent, Prices Rise Actively] On Wednesday, the aluminum price rally expanded. Affected by the reduced output of new scrap during the off-season and the high temperatures that inhibited dismantling volumes, aluminum scrap supply tightened, and prices rose rapidly in response. The cost pressure on secondary aluminum plants increased, and their willingness to lower prices strengthened. Yesterday, the market generally raised prices by 100 yuan/mt, with the SMM ADC12 price increasing by 100 yuan/mt to 20,150 yuan/mt. However, due to the high temperatures dragging down downstream operations on the demand side, orders for secondary aluminum plants decreased, and market transactions were sluggish.

Price Announcement

[SMM Analysis]Cost Support vs. Weak Demand: ADC12 Trend Awaits Peak Season Guidance

[SMM Aluminum Morning Meeting Summary: Macro Easing Expectations Heat Up, Aluminum Prices Still Have Rebound Potential] On the macro front, Trump's pressure on the US Fed to cut interest rates, coupled with a potential change in its leadership, has strengthened easing expectations. Additionally, the potential tariff hike on India may disrupt the global supply chain. Domestically, seven departments have jointly promoted financial support for the high-end development of the manufacturing industry, with a clear goal of establishing a financial system adapted to green and intelligent manufacturing by 2027, which is a medium and long-term positive for the demand growth of aluminum in new energy, high-end equipment, and other fields. On the supply side, the operating aluminum capacity in China has remained stable, with the proportion of liquid aluminum pulling back and an increase in casting ingot volume, leading to more marketable supplies and a continuous inventory buildup in social inventory, which has suppressed the upward movement of aluminum prices. On the demand side, the off-season atmosphere persists downstream, with spot purchasing as needed and spot premiums struggling to rise. The PV, NEV, and home appliance sectors are still in the off-season. Despite the decline in aluminum prices, there has been no significant improvement trend in the orders on hand at processing plants. In terms of inventory, aluminum ingot and aluminum billet inventories continue to accumulate, with strong expectations for further inventory buildup. In the short term, spot premiums and discounts are in the doldrums, and it is expected that aluminum prices will remain under pressure. However, with the heating up of macro easing expectations, after the end of the seasonal off-season and the implementation and transmission of policies, aluminum prices still have rebound momentum. Whether subsequent prices can break through will depend on observing the inventory trend and consumption recovery signals during the transition period from the off-season to the peak season in August.

[SMM Morning Comment on Cast Aluminum Alloy: Tight Supply of Aluminum Scrap Supports Costs, Sluggish Demand Limits Upside Room for ADC12] Although aluminum prices only rebounded slightly on Tuesday, due to the reduced output of new scrap during the off-season and the impact of high temperatures on dismantling volumes, the supply of aluminum scrap became tight, and prices rose rapidly. As a result, the cost pressure on secondary aluminum plants increased, and their willingness to lower prices strengthened. However, on the demand side, downstream operations declined due to high temperatures, leading to reduced orders for secondary aluminum plants and sluggish market transactions. Prices struggled to rise.

[SMM Analysis]New secondary aluminum projects surged in H1 of 2025, but actual output remained limited

[SMM Aluminum Morning Meeting Summary: Macro Trade Frictions Ease, but Invisible Inventory Pressure of Aluminum Ingots Persists] On the macro front, the EU postponed retaliatory tariffs against the US, easing trade frictions and strengthening expectations for US Fed interest rate cuts (50 basis points cut expected within the year), putting pressure on the US dollar and benefiting commodities. On the supply side, domestic operating aluminum capacity remained stable, with the proportion of liquid aluminum pulling back and an increase in casting ingot volume, leading to more marketable supplies and a continuous inventory buildup in social inventory, suppressing aluminum price increases. On the demand side, the off-season atmosphere persisted downstream, with spot purchasing as needed and weak upward momentum in spot premiums. The PV, NEV, and home appliance sectors remained in the off-season. Despite the decline in aluminum prices, there was no significant improvement trend in orders on hand at processing plants. On the inventory front, weekly outflows from warehouses of aluminum ingots increased by 18,200 mt, but outflows from warehouses of aluminum billets declined, and inventories of aluminum ingots and billets continued to accumulate, highlighting invisible inventory pressure and the suppression of the off-season consumption. In the short term, under the off-season consumption, expectations for inventory buildup remain strong, and premiums and discounts of spot aluminum are in the doldrums, with a projected sustained pressure-bearing operation pattern. Whether subsequent prices can break through depends on observing the inventory trend and signals of consumption recovery during the transition from the off-season to the peak season in August.

[SMM Morning Comment on Cast Aluminum Alloy: The most-traded cast aluminum futures contract edges down slightly, likely to maintain narrow and weak oscillations in the short term] On Monday, aluminum prices continued to correct downward. Aluminum scrap prices remained firm for the time being, but silicon prices continued to decline. Yesterday, the price of oxygen-blown #553 silicon fell by 250 yuan/mt from last Friday to 9,450 yuan/mt, continuing to weaken the cost support for secondary aluminum alloy. Meanwhile, end-use consumption has remained sluggish recently, with some downstream industries experiencing a decline in production due to high temperatures, leading to a reduction in orders for secondary aluminum plants and sluggish market transactions.