The off-season, coupled with cost pressure, will lead to a decline in the operating rate of secondary aluminum producers in July [SMM analysis]

Survey data on the operating rate of secondary aluminum alloy enterprises by region and scale in June 2025:

According to the SMM survey, the operating rate of secondary aluminum producers rebounded by 0.8 percentage points MoM to 41.9% in June 2025, up 0.3% YoY. The increase in the operating rate in June was mainly due to two factors: first, the increase in orders from terminal users such as the automotive and motorcycle industries drove an unexpected rise in the operating rate of some large plants primarily using aluminum liquid; second, compared to May, there were no holiday disruptions in June, leading to a recovery in production.

As July approaches, the operating rate trends of secondary aluminum producers continue to diverge. Leveraging stable orders and the advantage of delivery brands, large producers are expected to increase production, driven by the active procurement of ADC12 by futures-physical traders for futures-physical arbitrage. However, the traditional off-season effect continues to manifest, with automakers potentially cutting production plans due to factors such as high-temperature holiday arrangements and finished product inventory backlogs. Additionally, tightened raw material circulation and intensified cost losses have led some enterprises to initiate furnace shutdowns for maintenance at the end of June or the beginning of July, which will drag down the overall operating rate of the industry. Based on a comprehensive assessment, the operating rate of the secondary aluminum alloy industry is expected to decline slightly in July.