This week, the overall operating rate of China's downstream aluminum processing leading enterprises rose by 0.8 percentage points MoM to 59.5%, indicating a mild market recovery. In specific segments, the operating rate of primary aluminum alloy increased by 1.0 percentage points to 56.6%, with a notable increase in primary aluminum consumption by top-tier enterprises. The operating rate of aluminum plate/sheet and strip rose by 1.0 percentage points to 65.0%, driven by stockpiling orders for can stock, automotive sheets, and other peak-season products. The operating rate of aluminum wire and cable increased by 0.8 percentage points to 62.6%, as the accelerated power grid construction cycle boosted terminal cargo pick-up. The operating rate of aluminum extrusion slightly rose by 1.0 percentage points to 50.5%, with automotive and PV orders maintaining growth, while construction extrusions remained sluggish. The operating rate of aluminum foil rebounded by 0.9 percentage points to 69.3%, mainly driven by the restart of air-conditioner foil production lines and the recovery of decorative foil demand. The operating rate of secondary aluminum slightly declined by 0.1 percentage points to 53.0%, as the off-season and ongoing losses continued to exert pressure, and policy impacts forced producers to cut production. It is expected that the aluminum wire and cable, aluminum plate/sheet and strip sectors will continue their upward momentum in late August, while the approaching traditional peak season of "September-October peak season" may further boost demand for aluminum foil and aluminum extrusion.

Futures: Overnight, LME copper opened at $9,775.5/mt, initially plunged straight to a low of $9,714/mt, then fluctuated considerably upward, touching a high of $9,780/mt near the close, and finally settled at $9,777/mt with a 0% change.

[SMM Morning Comment on Cast Aluminum Alloy: The most-traded aluminum futures contract for cast aluminum alloy rose slightly overnight, supported by tight aluminum scrap supply in the future market] Short-term cost support and policy disruptions may continue to support prices to fluctuate upward, but weak demand and inventory buildup pressure will limit upside room. Attention should be paid to the implementation of policies and the pace of demand recovery during the peak season.

[SMM Aluminum Morning Meeting Summary: Under the Game Between Macro and Fundamentals, Aluminum Prices Hold Up Well in the Short Term but Face the Risk of Jumping Initially and Then Pulling Back] In terms of macro, although Thursday's US data did not shake the rationale for an interest rate cut in September, it did spark market concerns that tariffs could still fuel inflation in the coming months and alter the trajectory of interest rate cuts for the remainder of the year. Fundamentally, in terms of supply, there have been relatively small changes, with the operating production of electrolytic aluminum showing a steady and slight increase. On the cost side, the total weekly cost for the electrolytic aluminum industry stood at 16,738 yuan/mt, with the industry still enjoying high profits. Demand side, as the September-October peak season approaches, downstream weekly operating rates have shown signs of recovery this week. However, under the influence of the off-season, consumption from terminals to processed materials has struggled to exceed expectations. The growth rates of industries that previously provided strong support, such as home appliances and PV, have slowed down. Some aluminum terminal export orders have also declined, and the construction industry continues to experience a super-seasonal decline. Amidst the off-season atmosphere, aluminum prices are fluctuating at highs, while consumption recovery remains relatively weak. Against the backdrop of still sufficient supply, the trend of inventory buildup continues in the short term. Overall, the combination of macro tailwinds both domestically and overseas, along with potential risks in electrolytic aluminum supply, has kept aluminum prices holding up well. However, during the consumption off-season, the pressure of inventory buildup remains significant. After the positive sentiment is digested, the center of aluminum prices may face the risk of jumping initially and then pulling back, with the 21,000 yuan/mt threshold still under pressure.

[SMM Weekly Aluminum Price Review: Aluminum Prices Hold Up Well at High Levels Supported by Macro Tailwinds, While Inventory Buildup Remains a Key Pressing Factor]

[SMM Analysis]Tightening supply drives prices up, and the price difference between primary metal and scrap continues to narrow

【SMM Scrap Aluminum Market Analysis: Four Converging Factors in 2025 Undermine Southeast Asia’s Comparative Advantage】In 2025, Southeast Asia’s scrap aluminum market plunged into a deep contraction, with export volumes dropping sharply. This downturn is expected to persist throughout the year. A synthesis of the macro environment and industry operations reveals four primary pressures: sudden tightening of local policies and geopolitical risks, rapid expansion of regional recycled-aluminum demand, port congestion coupled with declining logistics efficiency, and the imposition of steep U.S. tariffs. The combined resonance of these factors makes it unlikely that Southeast Asia’s export competitiveness in scrap aluminum can recover in the short term.