[SMM Analysis]Secondary Aluminum Market Remains Strong in Short Term Focus on Demand Recovery and Policy Implementation

[SMM Aluminum Weekly Review: Demand Shows No Significant Improvement, Inventory Inflection Point Yet to Arrive, Aluminum Prices Remain Under Pressure in the Short Term]

[SMM Aluminum Morning Brief: Macro Tailwinds and Fundamentals Intertwined, Aluminum Prices Expected to Fluctuate at Highs in Short Term] Integrating macro and fundamental factors, aluminum prices during the traditional September peak season are more likely to rise than fall overall, yet upside resistance persists. For aluminum prices to effectively break through the key resistance level of 21,000 yuan/mt, the market must await the materialization of consumption peak season expectations during the September-October peak season. In the short term, prices are expected to fluctuate at highs.

[SMM Cast Aluminum Alloy Morning Comment: Policy Wait-and-See Sentiment Coupled with Tight Raw Material Supply Intensifies Market Game] On Wednesday, aluminum prices fluctuated rangebound, with secondary aluminum producers maintaining stable quotations. The SMM ADC12 price held steady at 20,750 yuan/mt. Currently, regional tax rebate policies remain unclear, fostering strong wait-and-see sentiment in the secondary aluminum market. Compounded by persistently tight raw material supply, procurement pressure on enterprises has increased. Demand side, as the traditional peak season approaches, downstream orders showed slight recovery. However, high prices continued to constrain transaction volumes, with downstream players primarily making just-in-time procurement.

[SMM Aluminum Morning Meeting Summary: Macro and Fundamentals in a Tug-of-War, SHFE Aluminum to Fluctuate at Highs in Short Term] Macro front, expectations for US Fed interest rate cuts intensified, coupled with China's policy efforts to stimulate domestic demand, creating an overall bullish sentiment that may boost aluminum consumption prospects. However, the transmission of domestic policy support to actual consumption still requires time. Fundamentals-wise, supply side saw minor growth in operating capacity as some replacement capacities came online, with production edging up slightly. The proportion of liquid aluminum is expected to rebound in September. Cost side, weekly total aluminum production costs showed minimal changes, with industry profits remaining high. Demand side remains the core focus for the market ahead. As the September-October peak season approaches, downstream operating rates showed stronger recovery signs last week, with aluminum extrusion and plate/sheet, strip and foil sectors posting notable increases. Entering early September, consumption only exhibits marginal improvement, and effective inventory destocking still needs time to materialize. However, current total inventories remain low, and some secondary aluminum enterprises in Anhui and Jiangxi provinces have received notices on the termination of tax rebate policies, posing risks of lower capacity utilization rates for scrap utilization enterprises, which may support primary aluminum consumption. Aluminum prices during the traditional September peak season are more likely to rise than fall overall, though upside resistance persists. For prices to effectively break through the key 21,000 yuan/mt resistance level, confirmation is needed through the realization of peak season consumption expectations and sustained strength in downstream operating rates, supported by a subsequent domestic aluminum ingot destocking inflection point.

On August 26, Zijin Mining Group Co., Ltd. (hereinafter referred to as "Zijin Mining") released its 2025 semi-annual report.

The first half of 2025 marked a turning point for the global aluminium industry, arguably its most turbulent period in recent memory.

Futures: LME copper opened at $9,873.5/mt overnight, initially touched a low of $9,851/mt at the beginning of the session, then rose all the way and touched a high of $10,015/mt near the end of the session, finally closed at $10,013.5/mt, up 1.4%, with trading volume reaching 26,000 lots and open interest reaching 277,000 lots.

[SMM Cast Aluminum Alloy Morning Comment: Bears Reduced Positions Overnight in Most-Traded Contract, High Reached 20,435 yuan/mt] On Tuesday, SMM ADC12 prices held steady at 20,750 yuan/mt. Post-September regional tax rebate policies remain unclear, with thick wait-and-see sentiment prevailing in the secondary aluminum market. Tight raw material supply further bolstered firm producer offers on cost support. Demand side, approaching traditional peak season drove slight recovery in downstream procurement, but high prices capped transaction volumes, leaving actual demand mediocre.