SMM's monthly production data for base metals is released at the end of each month, aiming to uncover the true fundamentals for industry chain professionals and investors, and providing a clearer grasp of the future direction of the metals market.

Futures: LME copper opened at $9,899/mt on Friday night, initially touched a low of $9,881/mt, then entered sideways movement with prices gradually moving upward, nearing a high of $9,924.5/mt before closing at $9,906/mt, up 0.68%.

[SMM Cast Aluminum Alloy Morning Comment: August Secondary Aluminum PMI Remains Below 50 Mark] Last Friday, aluminum prices remained stable, while most secondary aluminum market quotations held steady. Due to tight circulation, aluminum scrap prices remained firm, continuing to support ADC12 prices on the cost side. Additionally, frequent reports of tax rebate cancellations and back taxes in multiple regions have intensified companies' cost transfer intentions, leading to a short-term price trend more likely to rise than fall. Demand side, as the traditional September peak season approaches, downstream procurement has only mildly recovered. High prices have suppressed market inquiries, resulting in active inquiries but limited actual transactions. The strengthening spot-futures price spread has improved the sales performance of trading firms engaging in both spot and futures markets.

[SMM Aluminum Morning Meeting Summary: Peak Season Nears with Marginal Consumption Improvement, Aluminum Prices Find Support but Face Resistance at Highs] Macro front, expectations for US Fed interest rate cuts intensified and China's policy stimulus boosted domestic demand, creating an overall favorable sentiment that may enhance aluminum consumption prospects. However, the transmission of domestic policy support to actual consumption still requires time. Supply side, with the commissioning of limited replacement capacity, operating capacity saw a modest increase, while production edged up slightly. The proportion of liquid aluminum is expected to rebound in September. Cost side, the weekly total cost for the aluminum industry showed minimal change, with high industry profits remaining intact. Demand side remains the core focus for the market ahead. As the September-October peak season approaches, downstream operating rates displayed stronger recovery signs last week, with aluminum extrusion and plate/sheet, strip and foil sectors showing varying degrees of growth. Entering early September, current consumption only exhibits marginal improvement, and effective inventory destocking still needs time to materialize. However, total inventory remains relatively low, and some secondary aluminum enterprises in Anhui and Jiangxi provinces have received notices on the termination of tax rebate policies, posing risks of declining capacity utilization rates for scrap utilization enterprises, which provides some support for primary aluminum consumption. During the traditional September peak season, aluminum prices are more likely to rise than fall overall, but resistance at highs persists. For aluminum prices to effectively break through the key resistance level of 21,000 yuan/mt, the market needs to witness the realization of consumption expectations during the September-October peak season, validated by subsequent domestic aluminum ingot destocking inflection points and sustained strength in downstream operating rates.

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.