Details of the hot topics in the aluminum market in June are as follows...

[SMM Aluminum Morning Meeting Summary: Short-Term Aluminum Prices Under Pressure, Tariff Threats and Inventory Buildup Dominate Market Sentiment] On the macro front, Trump's threat to impose additional tariffs (up to 30%) on 14 countries may curb global aluminum trade liquidity and exacerbate supply chain uncertainties. Although the EU is seeking a preliminary agreement with the US for a "less than 10%" tariff rate to alleviate tariff pressure, the outcome of negotiations remains uncertain. On the fundamental front, some aluminum smelters have increased their casting ingot production. As July approaches, the off-season atmosphere is strong across downstream sectors. Coupled with the high aluminum prices further suppressing production performance, spot market 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 has continued to decline on a MoM basis. Overall, domestic electrolytic aluminum and aluminum billet inventories have continued to build up. Coupled with weak demand during the off-season, sluggish orders, and export barriers, the upside potential for prices is suppressed. It is expected that short-term aluminum prices will face increased pressure at high levels, with upside potential remaining but relatively narrow. Subsequent attention should be paid to casting ingot production and inventory changes.

[SMM Morning Comment on Cast Aluminum Alloy: The most-traded contract edges up overnight amid intensified competition between cost support and weak demand] On Monday, aluminum prices extended their decline, with SMM ADC12 prices falling by 100 yuan/mt to 20,000 yuan/mt. After July, factors such as the off-season due to high temperatures and elevated aluminum prices have continued to impact downstream orders, prompting some downstream enterprises to initiate production cuts. Although futures and spot traders have been actively inquiring about prices and trading volume of delivery brands has increased, the end-use consumer market remains sluggish, posing a key resistance to price increases.

[Daily Review of ADC12 Prices: Aluminum Prices Extend Decline, Secondary Aluminum Prices Partially Follow Suit] In the spot market, SMM A00 aluminum prices fell by 130 yuan/mt from last Friday to 20,640 yuan/mt, while SMM ADC12 prices dropped by 100 yuan/mt to 20,000 yuan/mt.

[SMM Midday Review of Spot Aluminum: Inventory Buildup Continues, Spot Premiums Show Mixed Performance] SMM reported on July 7: In the morning session, the center of the SHFE aluminum front-month contract shifted down to around 20,650 yuan/mt. As the futures market's center moved down, overall market trading improved. Inventory buildup continued in east China, and the market was in a buyer's market amid oversupply. Despite the decline in aluminum prices and an increase in inquiries from downstream buyers, market transactions were still at a discount of 10 to 20 yuan/mt against SMM. Today, SMM A00 aluminum was quoted at 20,640 yuan/mt, down 130 yuan/mt from the previous trading day, and at a discount of 30 yuan/mt against the July contract, down 10 yuan/mt from the previous trading day.

SMM Alumina Morning Comment on July 7

[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.