China's Secondary Aluminum Ingot Inventory Down 206 MT, Driven by Foshan Destocking

Trading sentiment in the central China market remained sluggish today. The night session rebounded, and downstream processing enterprises held a wait-and-see attitude. Off-season demand weakness, coupled with safety inspection restrictions, left downstream factories with low willingness to purchase, with only some traders restocking in small volumes. Purchases by some traders with insufficient quotas for invoices dated this month boosted prices for those cargoes, but overall trading volume was limited. Ultimately, actual transaction prices in the central China market hovered around a discount of 90-110 yuan/mt against the SHFE aluminum August contract.

[Aluminum Ingot Destocking Continues to Cement Bottom Support; Rate Hike Expectations and Off-Season Demand Constrain Rebound Room] Overall assessment: recently, macro front sentiment has improved slightly. The persistent Middle East geopolitical risk premium and China's continued destocking of aluminum ingots have jointly underpinned the aluminum price movement. However, the ongoing deployment of future aluminum capacity outside China, weak traditional end-use demand in China, and recurring uncertainties from the macro perspective have imposed significant pressure on the upside room for aluminum prices. In the short term, aluminum prices are expected to maintain a consolidation pattern.