[SMM Analysis: Aluminum cost fell 1.7% MoM in July，Some aluminum smelters reported a slight increase in electricity fees in August.] According to SMM data, the average tax-inclusive full cost of China's aluminum industry in July 2025 was 16,261 yuan/mt, down 1.7% MoM and 5.8% YoY. During the period, alumina prices were boosted by macro policies such as "anti-rat race" competition, but due to the low absolute price at the beginning of July, the monthly average alumina price in July fell MoM, and its cost-supporting effect became evident in August.

Futures market: LME copper opened at $9,626/mt overnight, initially climbed to a high of $9,665/mt, then fluctuated downward to hit a low of $9,580.5/mt during the session, and maintained rangebound fluctuations before finally closing at $9,607/mt, down 1.26%, with trading volume reaching 47,000 lots and open interest at 271,000 lots.

[SMM Morning Comment on Cast Aluminum Alloy: Secondary Aluminum PMI Remained Below the 50 Mark in July, and the Market in August Continued to Be Hindered by the Off-Season Demand] Yesterday, aluminum prices dropped back slightly, and the secondary aluminum market maintained a stable pattern, with SMM ADC12 prices holding steady at 20,100 yuan/mt. Recently, end-use consumption has been sluggish, and actual transactions have been sluggish amid weak demand. However, the consistently high purchasing prices of aluminum scrap have provided support for prices. Overall, cost support has led to a relatively moderate decline in ADC12 prices this week, with the discount to A00 narrowing. However, under the pressure of the off-season demand, there is significant resistance to price increases. In the short term, cost support, weak demand, and high inventory pressures are competing with each other, and ADC12 prices may continue to fluctuate rangebound.

[SMM Aluminum Morning Meeting Summary: Manufacturing Sector Sentiment Pulls Back, Short-Term Aluminum Prices Predominantly in the Doldrums] Overall, on the macro side, the US Fed maintained interest rates unchanged, and the US dollar index remained strong. Domestically, policies related to "combating rat race competition" drove industrial metals higher, with the long-term tone of "promoting consumption and stabilizing growth" remaining unchanged. On the fundamental side, amid the release of supply increments and the suppression of the off-season consumption, the expectation of inventory buildup remains strong. Additionally, recently, market sentiment towards policies such as "combating rat race competition" and "high-quality development" has cooled down, causing futures to jump initially and then pull back. In the short term, aluminum prices are expected to predominantly experience a high-level pullback. Subsequent attention should be paid to changes in inventory and market sentiment.

[SMM Analysis: Aluminum Wheel Exports "Three Consecutive Increases", Primary Aluminum Alloy Operating Rate Rebounds Against the Cycle in July] The preliminary operating rate of China's primary aluminum alloy industry in July was 51.5%. After excluding the impact of inconsistent operating days from June, it increased by 0.6% MoM, showing a "stronger-than-usual off-season" characteristic in monthly performance. The PMI of primary aluminum alloy in July reached 54.4%, rebounding significantly by 17.9 percentage points MoM from June, and surging above the 50 mark, indicating an unexpected rebound against the trend in the off-season industry. Breaking down the details...

[SMM data：The proportion of liquid aluminum pulled back significantly in July, and whether it can recover in August remains to be verified]According to SMM statistics, domestic aluminum production in July 2025 (31 days) increased by 1.05% YoY and 3.11% MoM. In July, the domestic aluminum operating capacity saw a slight MoM increase, primarily due to the start-up of the second-phase replacement project for aluminum smelters in Shandong-Yunnan, which led to the recovery of operating capacity. Due to the strong off-season atmosphere in the terminal market, alloy production cuts were evident across various regions. In July, the proportion of liquid aluminum in domestic aluminum smelters pulled back significantly, with the industry's proportion of liquid aluminum declining by 2.06 percentage points MoM to 73.77% this month.

[SMM Analysis]Overall, cost support has made the decline in ADC12 prices relatively moderate this week, with the discount against A00 narrowing; however, under the pressure of the off-season demand, the upward resistance for prices is obvious. In the short term, cost support, weak demand, and high inventory pressures are interacting, and ADC12 prices may continue to fluctuate rangebound.