[SMM Morning Comment on Cast Aluminum Alloy: Social Inventory Buildup of Aluminum Alloy Slows Down Significantly, Costs Drive Spot Prices Higher Again] Aluminum scrap prices rose rapidly in line with aluminum prices during the week, with mounting cost-side pressure igniting market sentiment for price adjustments. Yesterday, the SMM ADC12 price increased by 100 yuan/mt to 20,250 yuan/mt. In August, the secondary aluminum market remained constrained by tight aluminum scrap supply, with enterprises facing sustained cost pressure, supporting the upward trend in ADC12 prices. However, weak end-use demand combined with high social inventory levels will limit the upside potential for price increases. It is expected that secondary aluminum alloy prices will primarily exhibit a narrow range of upward fluctuations at the beginning of the month. In the short term, close attention should be paid to the progress of end-use demand recovery and improvements in aluminum scrap supply.

[SMM Aluminum Morning Meeting Summary: Rising Expectations for US Fed Interest Rate Cut, Aluminum Prices Remain Under Pressure Amid Off-Season Consumption] Summary: On the macro side, expectations for a US Fed interest rate cut 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 deepened cooperation agreement on aluminum, leading to a subtle increase in risk-averse sentiment among investors. In terms of fundamentals, there has been relatively small change in supply, with aluminum production 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 is still experiencing a super-seasonal decline. Social inventory of electrolytic aluminum has exceeded the 550,000 mt threshold. Although there have been fluctuations in inventory data due to uneven arrivals during the week, the high aluminum prices amid the off-season may further damage consumption, and the trend of continued inventory buildup in the short term remains unchanged. Overall, the positive macro environment combined with potential risks in electrolytic aluminum supply has driven aluminum prices to rebound to high levels. However, amid the off-season consumption, 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 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 capability has been validated to a certain extent at this price level.

[SMM Analysis]ADC12 aluminum alloy prices rose, supported by the shortage of aluminum scrap

[SMM Weekly Aluminum Price Review: Macro Conditions Improve, Coupled with Potential Supply Risks in Fundamentals, Aluminum Prices Rebound to Highs Again]

[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.