[SMM Analysis: Review of Domestic Aluminum Prices in H1 2025: "Unexpected Events" Frequently Occur, Aluminum Prices Remain Resilient]Under the influence of frequent "unexpected events" in both macro and fundamental aspects, aluminum prices fluctuated more severely in the first half of 2025. In Q1, the domestic fundamental situation was better than the off-season performance in previous years, providing support for aluminum futures and spot prices. In Q2, the Sino-US tariff battle intensified, causing aluminum futures and spot prices to plummet. However, upon reviewing the trend, it can be seen that after the market sentiment was digested, aluminum prices rebounded rapidly, demonstrating resilience. Additionally, the social inventory of aluminum ingots in the off-season from May to June decreased unexpectedly, leading aluminum futures and spot prices to rise strongly during the off-season, with outstanding performance. Overall, the center of aluminum prices in H1 2025 showed a trend of oscillating upward. The average spot aluminum price in H1 2025 was around 20,318 yuan/mt, up 2.6% from H1 2024.

According to SMM statistics, as of July 18th, the days of inventories at domestic aluminum rod plants stood at 9.33 days, a decrease of 0.61 days WoW. In terms of inventory ratio, the domestic aluminum rod plant inventory ratio was recorded at 1.33, a decrease of 0.09 from the previous week.

Currently, the downstream sector as a whole is under the shadow of the off-season atmosphere. The operating rate of the secondary alloy sector continues to decline. However, due to the pullback in the center of aluminum prices, there is differentiation among different sectors. The weekly operating rates of aluminum extrusion and aluminum wire and cable have slightly rebounded, driving marginal improvements in the industry's operating rate. The operating rate of the aluminum processing industry rose by 0.2 percentage points WoW to 58.8%.

Futures market: Overnight, LME copper opened at $9,606.5/mt, initially touched a low of $9,597/mt, then fluctuated upward rangebound, and finally closed at $9,678/mt, up 0.43%, with trading volume at 11,000 lots and open interest at 268,000 lots.

[SMM Morning Comment on Cast Aluminum Alloy: Social Inventory of Aluminum Alloy Ingots Exceeds 30,000 mt, with Foshan and Ningbo as the Main Contributors to the Increase; Secondary Aluminum Prices Unlikely to Break Out of Fluctuation Rangebound in the Short Term] Following the significant drop in aluminum prices on Monday, there was a slight rebound for three consecutive days starting from Tuesday, with a cumulative increase of 100 yuan/mt. However, the secondary aluminum market struggled to catch up, and prices remained stable. On Thursday, the SMM ADC12 price remained unchanged at 20,000 yuan/mt. As the aluminum price decline was greater than that of ADC12, the price spread between the two narrowed WoW. In the short term, aluminum prices are expected to remain in the doldrums, and with the support of aluminum scrap costs, the price spread is expected to narrow further.

Futures Market: On the previous trading day's night session, the most-traded SHFE aluminum 2509 contract opened at 20,400 yuan/mt, with a high of 20,545 yuan/mt, a low of 20,380 yuan/mt, and closed at 20,520 yuan/mt.

[SMM Analysis]This week, as the decline in aluminum prices outpaced that of ADC12, the inversion between the two narrowed compared to last week (WoW). In the short term, aluminum prices are expected to continue in a doldrums pattern. Supported by aluminum scrap costs, the price spread between the two is anticipated to narrow again. However, given weak demand and high social inventory levels, the upside room for ADC12 prices is also limited. It is expected that in the short term, secondary aluminum alloy prices will maintain a fluctuating rangebound pattern.

To ensure consistency between the data and its source and respond to customer feedback, we will uniformly adjust the date display of LME inventory data in our non-ferrous metal database.