[SMM Spot Aluminum Lunchtime Review: Spot Premiums Continue to Fall, Market Transactions Sluggish] On the inventory side, according to SMM's domestic aluminum ingot inventory data, as of July 1, the domestic inventory of electrolytic aluminum ingots in three regions stood at 329,500 mt, showing an inventory buildup of 0.65 compared to the previous trading day. In the short term, despite the low inventory levels of aluminum ingots, there has been a slight trend of inventory buildup. The spot market is experiencing strong fear of high prices, with poor downstream demand and significant production cuts. Purchase willingness is low, and transactions are occurring at a discount. It is expected that spot premiums will show a narrowing trend in the short term.

[SMM Morning Comment on Cast Aluminum Alloy: Aluminum Prices Weaken, Secondary Aluminum Market Shows Strong Wait-and-See Sentiment, ADC12 to Fluctuate Rangebound in the Short Term] On Monday, aluminum prices weakened overall, and the secondary aluminum market generally adopted a cautious wait-and-see attitude, with a general lack of willingness to adjust prices. The SMM ADC12 price remained stable at 20,000-20,200 yuan/mt. However, demand continued to be weak, with downstream enterprises maintaining just-in-time procurement, and market trading activity remained sluggish.

[SMM Aluminum Morning Meeting Summary: Proportion of Liquid Aluminum Pulls Back, Increase in Casting Ingot Volume May Be Bearish for Aluminum Prices] Overall, on the macro side, domestic favorable policies continue to intensify, promoting the direction of consumption unchanged; overseas macro conditions are a mix of bullish and bearish factors, with risks still present. On the fundamental side, in some regions, aluminum smelters have increased their casting ingot volume. Coupled with the off-season downstream and fear of high prices, market transactions are far from ideal. Aluminum ingot inventory has seen a slight buildup, and spot premiums/discounts have weakened significantly. It is expected that aluminum prices will be in the doldrums in the short term. Attention should be paid to the changes in casting ingot volume and inventory in the future.

[SMM Data: In late June, casting ingot production increased in some regions, and high downstream inventory in July forced the proportion of liquid aluminum to pull back] SMM reported on June 30: According to SMM statistics, domestic aluminum production in June 2025 (30 days) increased by 1.57% YoY and decreased by 3.23% MoM. The operating capacity of domestic aluminum smelters in June saw a slight MoM fluctuation. SMM learned that the second-phase replacement of aluminum smelters in Shandong-Yunnan began at month-end, requiring production cuts at the original plants and new plant startups only after the replacement capacity passed inspections. The proportion of liquid aluminum in domestic aluminum smelters continued to rise in June, increasing by 0.1 percentage points MoM to 75.8%, with a smaller increase than expected at the beginning of the month, mainly due to high downstream alloy inventory and increased casting ingot production at aluminum plants in some regions. It is expected that the proportion of liquid aluminum will show a downward trend in July. Based on SMM's data on the proportion of liquid aluminum, it is estimated that domestic aluminum casting ingot production in June decreased by 12.77% YoY to approximately 872,500 mt.

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[SMM Data: Increased Casting Ingot Production in Some Regions in Late June; High Downstream Inventory in July Forces Proportion of Liquid Aluminum to Pull Back] SMM reported on June 30: According to SMM statistics, domestic primary aluminum production in June 2025 (30 days) increased by 1.57% YoY and decreased by 3.23% MoM. In June, the operating capacity of domestic primary aluminum smelters saw a slight MoM fluctuation. SMM learned that at month-end, the second-phase replacement of primary aluminum production in Shandong-Yunnan began, requiring the original plant to cut production and pass acceptance inspections before restarting pots at the new plant. The proportion of liquid aluminum in domestic primary aluminum smelters continued to rise in June, with the industry's proportion of liquid aluminum increasing by 0.1 percentage points MoM to 75.8%. The increase was smaller than expected at the beginning of the month, mainly due to the current high inventory of downstream alloy products and increased casting ingot production at aluminum smelters in some regions. It is expected that the proportion of liquid aluminum will show a downward trend in July. Based on SMM's data on the proportion of liquid aluminum, the domestic primary aluminum casting ingot production in June decreased by 12.77% YoY to approximately 872,500 mt.