July 11: High aluminum prices suppress downstream consumption; aluminum billet processing fees continue to run at a low level [Daily Review of Spot Aluminum Billets]

SMM July 11 Report:

On July 11, SMM A00 aluminum closed at 20,790 yuan/mt, down 30 yuan/mt from the previous trading day, with a discount of 70 yuan/mt against the July contract, and the discount against the previous trading day widened by 10 yuan/mt. The price spread between Henan and Shanghai was -130 yuan/mt, widening by 20 yuan/mt from the previous trading day. SMM central China closed at 20,660 yuan/mt, down 50 yuan/mt from the previous trading day. On July 11, SMM A00 aluminum (Foshan) closed at 20,780 yuan/mt, down 20 yuan/mt, with a premium of 80 yuan/mt against the next-month contract and a discount of 80 yuan/mt against the current-month contract (unit: yuan/mt).

According to SMM statistics, regarding the inventory of aluminum billet in two domestic locations, the inventory of aluminum billet in Guangdong was 72,600 mt, and the inventory of aluminum billet in Wuxi was 22,100 mt, totaling 94,700 mt, a decrease of 1,700 mt MoM. Supported by low inventory during the week, SHFE aluminum continued to fluctuate at highs. However, due to the impact of high aluminum prices, downstream consumption was suppressed. Additionally, the pressure on the aluminum billet supply side intensified, and suppliers intended to cash in at high prices to maintain capital flow. But downstream buyers were not receptive to the high aluminum prices. The impact of the off-season, combined with high temperatures affecting production shifts, led to insufficient rigid demand downstream. Under the oversupply situation, aluminum billet processing fees mostly hovered around parity, and market transactions were sluggish. As of July 11, 2025, the aluminum billet market in Foshan reported processing fees of 20/70 yuan/mt, down 10 yuan/mt; the processing fees in Wuxi were quoted at 60/110 yuan/mt, down 50 yuan/mt; the processing fees in Nanchang were reported at -30/20 yuan/mt, unchanged (unit: yuan/mt).

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