Macro Disturbances and Peak Season Expectations Intertwined, Aluminum Prices Fluctuate Upward in the Short Term Awaiting Validation [SMM Aluminum Price Weekly Review]

From a macro perspective, the July US Fed meeting minutes showed that most policymakers believe the upside risks of inflation exceed the downside risks of employment, leading to a cooling of interest rate cut expectations, with market focus on the global central bank annual meeting this Friday. Affected by this, the US dollar rebounded slightly during the week, exerting some pressure on base metals; domestically, relevant meetings proposed that strong measures will be taken subsequently to consolidate the real estate market, with market sentiment leaning optimistic.

From a fundamental perspective, on the supply side, with the commissioning of a small amount of replacement capacity, production increased slightly; cost-wise, the full cost of domestic aluminum was 16,718 yuan/mt, down 20 yuan/mt WoW, with industry profits still maintained around 3,960 yuan/mt. The demand side remains the core focus for the market going forward. When aluminum prices operated around 20,500 yuan/mt during the week, restocking by downstream enterprises increased, with some companies starting to stockpile for improved orders in the upcoming peak season. However, as aluminum prices rebounded, end-user shipments declined again, and spot procurement by processing material enterprises decreased significantly.Overall, high aluminum prices exert some pressure on off-season consumption, but as the peak season approaches gradually, expectations for improved orders strengthen. During the week, aluminum ingot inventory pressure decreased, with inventory dropping slightly to 596,000 mt, and the SHFE aluminum backwardation structure strengthened slightly, supporting aluminum prices to rebound again above 20,600 yuan/mt.

In summary,short-term consumption shows only marginal improvement, and aluminum ingot inventory faces renewed buildup pressure, but current total inventory is not high. Additionally, some secondary aluminum enterprises in provinces such as Anhui and Jiangxi have received notices of termination of tax rebate policies, posing a risk of declining capacity utilization rates for scrap utilization enterprises, which provides some support for primary aluminum consumption.Subsequent aluminum prices need to await the realization of peak aluminum consumption season. It is expected that the SHFE aluminum trading range will be 20,500-20,800 yuan/mt next week, and the LME aluminum trading range will be $2,540-2,600/mt.

   The model predicts that the closing price of the most-traded aluminum contract from this Friday to next Thursday (2025-08-28) will operate within a range of [20,265, 20,845], with a price center of 20,560, in yuan/mt. The extreme price range is [19,890, 21,220], the normal price range is [20,140, 20,970], and the conservative price range is [20,390, 20,720]. Next week's price trend is expected to fluctuate rangebound or be in the doldrums. The support range is [20,140, 20,390], and the resistance range is [20,720, 20,970].

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