Preliminary Data on China's Aluminum Billet Production in August Released! Have All Provinces Fully Resumed Production? [SMM Analysis] The storm gradually subsided! The final scale of primary aluminum billets production cuts in July was lower than expected, with a smooth resumption pace in August. Three main reasons contributed to this: (1) Aluminum prices hovered at highs during the off-season, and the adaptability of the industry chain to high aluminum prices strengthened; (2) Aluminum smelters adopted a clear stance, leaving limited room for aluminum billet producers to halt or cut production; (3) After the production cut turmoil, the center of processing fees slightly rose, easing financial pressure on aluminum billet enterprises....

[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...

Overall, July’s petroleum coke imports rose significantly MoM, with uncalcined petroleum coke (sulphur content < 3%) imports totaling 368,400 mt, up 38.09% MoM, reflecting growing domestic demand for low-sulphur petroleum coke. Since Q3, downstream anode material manufacturers have actively stockpiled, while domestic low-sulphur coke supply tightened. These dual factors boosted the low-sulphur coke market, coupled with just-in-time procurement by aluminum carbon producers, driving sustained market recovery. Domestic petroleum coke prices rose accordingly, port shipments improved markedly, and port inventories shifted to destocking. With robust domestic demand, traders showed moderate buying sentiment in the overseas market. However, considering high port inventory levels, SMM expects Q3 petroleum coke imports may decline slightly compared to Q2.

The September tender for benchmark downstream aluminum enterprises remains undetermined. Although there is no clear support from both supply and demand sides in the aluminum fluoride market, the strong support from fluorite—a core raw material for aluminum fluoride—has recently dominated, coupled with the auxiliary effect of sulphuric acid fluctuating at highs. Even with a slight weakening in aluminum hydroxide prices, overall raw material costs still show a modest upward trend, which may continue to provide cost support for aluminum fluoride production. Amid mounting cost pressures, production pressures on enterprises are intensifying. With cost-side support, aluminum fluoride prices are expected to rise in September, but the evident price-driving sentiment among downstream aluminum enterprises has somewhat constrained the upward movement of aluminum fluoride prices. Overall, the aluminum fluoride market in September will be caught in a tug-of-war between "cost support driving bullishness" and "downstream price pressure limiting gains," making a significant price surge unlikely.

August 31 News: According to SMM statistics, aluminum billet inventory in mainstream consumption areas in China totaled 134,000 mt on August 28, up 1,000 mt from Monday and 9,500 mt WoW. This week, aluminum billet inventory showed a slight buildup trend, interrupting the continuous decline over the past two weeks, with inventory trends fluctuating. The weekly inventory increase was mainly driven by higher arrivals of billets from north China to warehouses in south China, while inventories in other regions remained stable. Notably, supply in Nanchang remained tight, maintaining a small decline. Regarding outflows from warehouses, SMM data showed total aluminum billet outflows reached 48,000 mt during 8.18-8.24, down 1,000 mt WoW.

[SMM Aluminum Downstream Analysis: August Aluminum Processing Industry PMI Reached 53.3% – Structural Recovery Under September-October Peak Season Expectations, Full Recovery of Aluminum Processing Still Requires Observation] The comprehensive PMI of the aluminum processing industry in August recorded 53.3%, up 9.2 percentage points MoM and 9.7 percentage points YoY.

According to the latest monthly survey by SMM, China's total aluminum rod production in July 2025 reached 360,500 mt, down 29,600 mt from June. Against the backdrop of continuous aluminum rod capacity expansion, after excluding the impact of calendar days, the operating rate of aluminum rod plants in July was only 53.2%, down 6.89% MoM and 6.7% YoY.

[SMM Analysis]On August 28, 2025, the Office of the US Trade Representative (USTR) announced a three-month extension of the "Section 301" tariff exclusions for certain Chinese goods. These tariffs originated from the US investigation into China's policies on technology transfer, intellectual property, and innovation. The exclusions, originally set to expire on August 31, 2025, have now been extended until November 29, 2025.