Aluminum billets : This week's performance was relatively stable, and the off-season market atmosphere did not see significant improvement

Although aluminum billet inventory slightly decreased mid-week, the inventory was affected by low domestic inflow. In the off-season, the recent downward trend in aluminum prices did not lead to a significant improvement in pick-up from warehouses, while the relatively strong aluminum billet conversion margins kept downstream procurement bearish. Downstream procurement has slightly increased but mainly through direct truck transportation, especially in south China and Nanchang. This has led to a decrease in the proportion of domestic aluminum billet inflows, with little change in inventory and pick-up from warehouses. Last week's aluminum billet pick-up from warehouses stabilized at 41,000 mt. As of August 1, domestic aluminum billet social inventory was 129,200 mt, down 2,000 mt from July 25 and down 3,300 mt from July 29. Additionally, some sources from Guangxi have been shipped to Nanchang, putting significant pressure on Nanchang's inventory and aluminum billet conversion margins. Domestic aluminum billet inventory remains at a three-year high for the same period, still 50,300 mt higher YoY. In early August, with weak demand in the off-season but limited supply pressure, SMM expects overall aluminum billet inventory to stabilize at around 120,000-150,000 mt.

With aluminum prices rebounding after falling below the 19,000 yuan/mt, conversion margins in various regions slightly adjusted this week. As of August 1, Nanchang's φ120 aluminum billet conversion margin decreased to 400 yuan/mt, down 60 yuan/mt WoW, while Wuxi's margin slightly decreased by 30 yuan/mt to 350 yuan/mt. Currently, Foshan's φ120 aluminum billet conversion margin is reported at 390 yuan/mt, down 10 yuan/mt, showing overall stability. SMM expects that aluminum billet conversion margins will remain relatively strong.