[SMM Analysis: Electrolytic Aluminum Costs Narrowly Pulled Back in May, with Mixed Cost Changes in June] SMM News on June 4: According to SMM data, the average tax-inclusive full cost of China's electrolytic aluminum industry in May 2025 was 16,333 yuan/mt, down 0.3% MoM and 5.1% YoY. During the period, disruptions in the bauxite sector in mid-May boosted alumina futures prices to rise rapidly, with spot prices following suit with a slight delay. Additionally, the alumina spot price trend was lower in the first half of the month and higher in the second half, resulting in a limited increase in the monthly average alumina price in May. It is expected that the monthly average price will rise significantly in June. SMM data shows that during the period (4.26-5.25), the monthly average SMM alumina index was 2,959.3 yuan/mt, up 0.15% MoM. In May 2025, the average spot price of SMM A00 aluminum was approximately 20,050 yuan/mt (April 26 - May 25), with an average profit of about 3,717 yuan/mt in China's electrolytic aluminum industry.

According to SMM statistics, in terms of domestic aluminum billet inventory in two locations, the inventory of aluminum billet in Guangdong was 60,600 mt, and the inventory of aluminum billet in Wuxi was 19,500 mt, totaling 80,100 mt, up 1,000 mt MoM. Today, aluminum prices staged a strong rebound, and the aluminum billet market still attempted to stabilize in the morning session. However, some suppliers had differing opinions on selling quotes amid high prices, while others held back on sales to refuse to budge on prices first. Limited circulation encouraged traders to enter the market and make purchases, leading to an overall improvement in transaction volumes. Today, the quotes in the Foshan aluminum billet market were 300/350 yuan/mt, down 50 yuan/mt; the processing fees in the Wuxi market were 320/400 yuan/mt, unchanged; and the processing fees in the Nanchang region were 250/300 yuan/mt, down 50 yuan/mt. (Unit: yuan/mt)

[Daily Commentary on ADC12 Prices: Aluminum Prices Basically Recovered Yesterday's Decline, While Secondary Aluminum Prices Remained Sluggish] Today, the SMM A00 aluminum price rebounded by 160 yuan/mt from the previous trading day to 20,280 yuan/mt. The secondary aluminum market struggled to follow the increase, with domestic SMM ADC12 prices holding steady in the range of 20,000-20,200 yuan/mt.

[SMM Analysis]Overall, the secondary aluminum market in May remained in a phase of struggle between intensifying weak demand and strengthening cost support. Among these factors, weak demand was the main driver pulling prices down. Despite the cost side providing some support to prices, under the influence of sluggish end-use consumption and insufficient purchase willingness, SMM ADC12 prices ultimately fluctuated within a narrow range of 20,100-20,400 yuan/mt, in the doldrums.

[SMM Midday Review of Spot Aluminum: Inventory Drawdown in Major Consuming Regions Supports Aluminum Prices] In the short term, the limited arrivals are conducive to maintaining premiums. However, downstream acceptance of high premiums has decreased, coupled with active selling by holders, premiums and discounts are expected to drop back slightly in the short term.

Overnight, LME copper opened at $9,566.5/mt, dipping to a low of $9,557.5/mt shortly after the opening bell.