Alumina prices rose amid growing demand for delivery brand, adding to cost pressure of aluminum smelters [SMM Aluminum Futures Brief Commentary]

》Check SMM Aluminum Product Quotes, Data, and Market Analysis

SMM reported on July 15th:

The most-traded SHFE aluminum 2508 contract opened at 20,410 yuan/mt today, with a high of 20,440 yuan/mt, a low of 20,375 yuan/mt, and closed at 20,430 yuan/mt, up 0.12%. Trading volume reached 61,400 lots and open interest stood at 205,000 lots.

SMM Commentary: Macro environment remains supportive domestically; US June CPI data is pending release, with market expectations that tariff-affected goods like furniture and toys may see accelerated price gains, potentially driving core inflation to 2.9%. Meanwhile, overseas tariff disturbances on trade flows persist. On the fundamental side, domestic operating capacity of electrolytic aluminum slightly decreased due to capacity replacement projects, with the liquid aluminum proportion dropping to 74.78% and casting ingot volume increasing. Cost side recently showed upward pressure from rising alumina prices. Demand side, most downstream sectors remain in off-season sluggishness, with aluminum prices rising during the traditional low season further suppressing demand, keeping aluminum fabricators' operating rates subdued. Coupled with renewed social inventory buildup of aluminum ingots, SMM expects aluminum prices to face downward pressure in the near term, with close monitoring needed on inventory and demand dynamics.

The most-traded alumina 2509 contract opened at 3,163 yuan/mt today, peaked at 3,183 yuan/mt, bottomed at 3,136 yuan/mt, and closed at 3,165 yuan/mt, up 0.03%. Trading volume reached 174,000 lots and open interest stood at 233,000 lots.

SMM Commentary: From the perspective of raw material demand for electrolytic aluminum production, alumina supply remains relatively loose with operating capacity near 88.5 million mt/year, while total annualized demand from electrolytic aluminum production plus net exports stands at approximately 86 million mt. SMM learned that electrolytic aluminum smelters' weekly alumina inventory rose by about 22,000 mt MoM last week. However, following alumina futures price increases, arbitrage between futures and spot markets emerged, with spot traders increasing purchases of delivery-grade alumina and showing active inquiries. Spot alumina availability tightened as suppliers refused to budge on prices, resulting in some high-premium transactions and driving spot price rebounds. In the near term, spot alumina prices are expected to hold up well, with continued focus on SHFE warrant registration volumes and operating capacity adjustments.

[Information provided is for reference only. This article does not constitute direct investment research advice. Clients should exercise caution in decision-making and not rely solely on this analysis. Any decisions made by clients are independent of SMM's positions.]