In May, the casting ingot volume in north China decreased significantly, while the proportion of liquid aluminum increased notably [SMM data]

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SMM News on May 30:

According to SMM statistics, domestic aluminum production in May 2025 (31 days) increased by 2.7% YoY and 3.4% MoM. In May, the operating capacity of domestic aluminum smelters remained stable MoM, mainly due to the absence of new projects, maintenance, or production cuts during the period, coupled with sufficient supply of raw materials for aluminum and moderate profits. The proportion of liquid aluminum in domestic aluminum smelters rose significantly in May, increasing by 1.48 percentage points MoM to 75.5% this month. This was mainly due to reduced casting ingot volumes and increased liquid aluminum proportions at enterprises in multiple northern regions. It is expected that the proportion will remain at highs in the subsequent period. Based on SMM's data on the proportion of liquid aluminum, the domestic aluminum casting ingot volume in May decreased by 6.15% YoY to approximately 913,000 mt.

Capacity Changes: As of the end of May, SMM estimated that the existing capacity of domestic aluminum smelters was approximately 45.69 million mt (SMM made revisions at the end of April by excluding some duplicated capacities after considering capacity replacement and old plant demolitions). The operating capacity of domestic aluminum smelters was approximately 43.91 million mt, with the industry's operating rate remaining flat MoM and increasing by 1.0 percentage point YoY to 96.1%. There were no new capacities, capacity replacements, or production cuts this month, and the aluminum industry operated steadily overall. The second batch of projects relocated from Shandong to Yunnan is expected to be implemented in Q3. SMM will continue to monitor changes in aluminum capacity.

Production Forecast: Entering June 2025, the operating capacity of domestic aluminum smelters will remain at highs. Considering the progress of remaining new or replacement projects this year, there are no short-term expectations for commissioning. In addition, the rising proportion of liquid aluminum may become a significant factor affecting the spot aluminum market. Currently, aluminum plants in multiple northern regions are increasing the proportion of liquid aluminum and reducing casting ingot volumes, which may subsequently impact arrivals in mainstream regions. It is still necessary to monitor the trend in the proportion of liquid aluminum in aluminum smelters, as well as the inventory and demand for alloyed products.

Data Source: SMM

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