Casting Ingot Production in North China Declined Significantly in May, While Proportion of Liquid Aluminum Rose Sharply [SMM Data]

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. The operating capacity of domestic aluminum smelters remained stable MoM in May, mainly due to the absence of new projects, maintenance, or production cuts during the period, coupled with sufficient supply of raw materials for aluminum production and moderate profits. The proportion of liquid aluminum in domestic aluminum smelters rose significantly in May, with the industry's proportion of liquid aluminum increasing by 1.48 percentage points MoM to 75.5% this month. This was mainly due to reduced casting ingot production and an increased proportion of liquid aluminum in enterprises across multiple regions in north China. It is expected that the proportion will continue to fluctuate at highs in the future. Based on SMM's data on the proportion of liquid aluminum, domestic aluminum casting ingot production 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 adjustments at the end of April by considering capacity replacement and the dismantling of old plants, eliminating some double-counted capacities). 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 is expected to remain at high levels. 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 is likely to become a significant factor affecting the spot aluminum market. Currently, aluminum plants in multiple regions of north China are increasing the proportion of liquid aluminum and reducing casting ingot production, which may subsequently impact arrivals in mainstream regions. It is still necessary to monitor the trend of changes in the proportion of liquid aluminum in aluminum smelters, as well as the inventory and demand for alloyed products.