The production of casting ingots increased in some regions in late June. In July, the high downstream inventory forced the proportion of liquid aluminum to pull back [SMM data]

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SMM June 30 News:

According to SMM statistics, China's aluminum production in June 2025 (30 days) increased 1.57% YoY but decreased 3.23% MoM. Domestic operating capacity saw minor fluctuations MoM. SMM learned that the second-phase capacity replacement project in Shandong-Yunnan started at month-end, requiring the original smelter to cut production and pass inspection before restarting pots at the new plant. The proportion of liquid aluminum at domestic smelters continued rising, up 0.1 percentage points MoM to 75.8%, with growth slower than early-month expectations due to high alloy inventory downstream and increased casting at some smelters. The liquid aluminum ratio is expected to pull back in July. Based on SMM data, cast ingot volume fell 12.77% YoY to around 872,500 mt.

Capacity Changes:By end-June, SMM estimated China's existing aluminum capacity at approximately 45.69 million mt (SMM adjusted the figure in late April by eliminating double-counted capacity after considering replacement projects and old plant demolitions), with operating capacity around 43.83 million mt. The operating rate dipped slightly MoM due to capacity replacements. The Shandong-Yunnan project requires the original smelter to cut production and pass inspection before restarting pots at the new facility. SMM will continue tracking aluminum capacity changes.

Production Forecast:In July 2025, domestic operating capacity will remain high as Yunnan's second-phase replacement project commences operation, boosting the industry operating rate. Other projects show no progress. On liquid aluminum ratio, weakening end-use demand and evident alloy inventory buildup prompted production cuts in Qinghai and central China, forcing smelters to increase casting. The ratio may pull back to around 74%. Future attention should focus on liquid aluminum ratio trends alongside alloy inventory and demand.

Data Source: SMM

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