[SMM Aluminum Morning Meeting Summary: Triple Pressures Weigh on Aluminum Prices, Low Inventory Support Intensifies Market Game] On the macro front, Trump plans to impose tariffs of up to 70% on multiple countries, coupled with a deadlock in trade negotiations, leading to a rise in market risk-aversion sentiment and further downward pressure on aluminum prices. Although the global manufacturing PMI has rebounded consecutively, indicating economic resilience, the index remains in contraction territory, providing limited support. On the fundamental front, some aluminum smelters in certain regions have increased their casting ingot production. As July approaches, downstream sectors are entering a pronounced off-season, coupled with high aluminum prices further suppressing production performance. Market spot cargo transactions are far from ideal. Aluminum ingot inventory has continued to build up, with spot premiums/discounts weakening significantly. The real-time cost of electrolytic aluminum continues to decline MoM. Overall, the current low inventory still provides support for aluminum prices. However, under the triple pressures of inventory buildup expectations, weakening consumption, and macro uncertainties, it is expected that the risk of downward pressure on aluminum prices will intensify in the short term. There is still upside potential, but it is relatively narrow. Subsequent attention should be paid to casting ingot production and inventory changes.

[SMM Morning Comment on Cast Aluminum Alloy: Primary Aluminum Decline Drives Weakness in Aluminum Scrap, with Regional Price Adjustments Diverging] Aluminum prices dropped back slightly last Friday, with the secondary aluminum market remaining stable. The SMM ADC12 price range was maintained at 20,000-20,200 yuan/mt. Entering July, factors such as the high-temperature off-season and elevated aluminum prices have continued to impact downstream orders, with some downstream enterprises initiating production reduction modes. Despite active inquiries from futures-to-spot traders and an increase in trading volume for delivery brands, the sluggish end-use consumption market remains a key resistance to price increases.

Considering the domestic and overseas market situations, the good performance of prebaked anode demand has laid a solid foundation for the industry to maintain a high operating rate. Based on current market dynamics, SMM predicts that the market supply of prebaked anodes in July will increase slightly.

From the prebaked anode export data in May 2025, export volumes showed an upward trend compared to the previous month. Specifically, export orders to Indonesia, Canada, and the UAE increased significantly, all exceeding 10%, with a total increase of over 80,000 mt. However, orders to Malaysia, Iceland, and Russia declined. Southeast Asia and the Middle East regions have become the core engines of export growth due to industrial policy support and active investment, while demand in some traditional markets has contracted due to local capacity adjustments. Overall, prebaked anode export orders performed well in 2025, primarily due to the continuous release of new capacity in overseas aluminum markets and the gradual recovery of some enterprises' capacity, driving demand growth for prebaked anode. Additionally, after entering Q2 2025, the raw material side of prebaked anode showed signs of weakness, gradually weakening the driving force behind price increases. It is expected that subsequent export order prices will turn downward. Looking ahead, factors such as frequent fluctuations in raw material prices, complex and changing geopolitical risks, and a slowdown in global macroeconomic growth may adversely affect the price system and delivery rhythm of prebaked anode export orders. Continuous attention to relevant market dynamics is required.

[Daily Review of ADC12 Prices: Aluminum Prices Decline, Costs Support Stable Secondary Aluminum Prices] On the spot market, SMM A00 aluminum prices fell by 90 yuan/mt from the previous day to 20,700 yuan/mt, while the SMM ADC12 price range remained stable at 20,000-20,200 yuan/mt.

【SMM Aluminum Downstream Weekly Survey: High-Temperature Off-Season Coupled with Weak Demand Drags Aluminum Processing Operating Rate Drop to 58.7%】Affected by factors such as the high-temperature off-season, high aluminum prices, insufficient profit margins, and weak downstream demand, the operating rate of the aluminum processing industry this week fell by 0.1 percentage point week-on-week (WoW) to 58.7%..

[SMM Spot Aluminum Lunchtime Review: Discounted Transactions Persist Across Regions, with Slight Improvement in Trading Volume on the Weekend] On the inventory side, according to SMM's data on aluminum ingot inventories in three domestic regions, as of July 4, the domestic inventory of electrolytic aluminum ingots stood at 321,000 mt, showing a destocking of 7,000 mt compared to the previous trading day. In the short term, despite the low inventory levels of aluminum ingots, the increase in casting ingot production has supplemented market supply. Additionally, there is a strong fear of high prices in the spot market, coupled with weak downstream demand and significant production cuts, resulting in low purchase willingness. Transactions are occurring at discounts, and it is anticipated that spot discounts will continue to widen in the short term.