SMM July 1 news:
According to SMM data, China's aluminum industry tax-inclusive full cost averaged down 0.8% MoM and down 4.2% YoY in June 2026, primarily due to the arrival of the rainy season during the period, which caused hydropower prices in Yunnan, Sichuan, and other regions to decline. Global aluminum prices fell in June, and the monthly average spot price of SMM A00 (May 26 – June 25) decreased 1.6% MoM, narrowing aluminum profit margins by 268 yuan/mt to 8,144 yuan/mt, with average profit up 108.0% YoY. Based on the monthly average price measurement, 100% of China's operating aluminum capacity was profitable in June.
From the cost breakdown perspective:
Alumina raw material: According to SMM data, the monthly average of the SMM alumina index in June was 2,702 yuan/mt (May 26 – June 25), up 1.0% MoM. Daily average alumina production edged up during the month, but driven by rumors regarding Guinean bauxite and production cuts or stoppages at northern alumina plants, alumina futures prices rose, pushing spot prices slightly higher. Entering July, the alumina market is expected to maintain the current supply landscape. Guinean bauxite is supported by costs, and prices have upward momentum. In the short term, the tug-of-war between cost support and ample supply pressure in the spot alumina market is expected to continue, with overall spot prices expected to remain in a sideways adjustment.
Auxiliary material market: In June, as the weak cost-side trend transmitted, combined with relatively ample supply, prebaked anode prices pulled back slightly. Downstream enterprises in the fluoride salt sector had limited ability to accept high prices, but high costs still provided some support; amid this tug-of-war, fluoride salt prices edged down MoM. Entering July, aluminum rigid demand underpins anode domestic demand, and Southeast Asian export demand offsets reductions from the Middle East, keeping the prebaked anode market relatively stable, with long-term contract procurement prices edging up slightly MoM. In the fluoride salt market, downstream buyers continue to make just-in-time procurement, and under pressure to push for lower prices and a wait-and-see stance, aluminum fluoride procurement prices are expected to edge down slightly in July. Overall, auxiliary material costs for aluminum are expected to remain stable in July.
Electricity prices: Electricity prices fell MoM in June, mainly due to the arrival of the rainy season, which caused a significant decline in hydropower prices in south China, reducing aluminum power costs. Entering July, some regions have reported rising coal prices, and electricity prices are expected to rebound slightly. Overall, aluminum power costs are expected to edge up slightly.
Overall, the weighted average tax-inclusive full cost of China's aluminum industry in June 2026 edged down slightly; the aluminum cost in July is expected to rebound slightly, with an average around 15,700-16,100 yuan/mt.
