In late July, China's aluminum billet processing fees have continued to pull back from their highs in June, with φ120 aluminum billet processing fees in some major consumption areas approaching the production cost line. Amid weakening marginal demand during the off-season, increased arrivals in South China, and a relatively stable center in aluminum prices, whether processing fees can hold firm near the cost line has become the core issue of market focus....

[SMM Analysis: Aluminum Billet Processing Fees Pull Back to Near Production Cost Line – Can They Hold Firm?] Entering late July, China’s aluminum billet processing fees have continued to pull back from June highs, with φ120 aluminum billet processing fees in some key consumption areas approaching the production cost line. The market is feeling the dual pressure of holding prices firm and making shipments. According to SMM’s latest data, as of July 23, social inventory of aluminum billets in China’s key consumption areas climbed to 121,000 mt, marking two consecutive weeks of inventory buildup. Over the same period, warehouse withdrawals fell to 33,000 mt, a clear WoW pullback. Against a backdrop of weakening off-season demand, increased arrivals in South China, and relatively stable aluminum price centers, whether processing fees can stabilize near the cost line has become the core issue the market is watching.

SMM July 24 At 11:30 today, the futures closing price was 104,890 yuan/mt, down 1,280 yuan/mt from the previous trading day. The average spot premium was 325 yuan/mt, down 5 yuan/mt from the previous trading day. Today, copper scrap prices fell by 500 yuan/mt from the previous trading day. The copper scrap sales sentiment index dropped to 2.6, and the purchasing sentiment index dropped to 2.2. The price difference between copper cathode and copper scrap was 3,818 yuan/mt, down 27 yuan/mt from the previous trading day. The price difference between copper cathode rod and secondary copper rod was 1,130 yuan/mt. According to the SMM survey, copper prices pulled back. Many copper scrap traders delivered short positions they had taken earlier. Meanwhile, secondary copper rod enterprises expected copper prices still had room to pull back. Additionally, as copper scrap traders delivered short positions, the raw material inventory of secondary copper rod enterprises, including in-transit stocks, was ample. Therefore, spot transactions were mediocre during the day.

[SMM Survey: Geely Launches Thunder 16-in-1 Intelligent Electric Drive with Magnesium Alloy Housing, Securing Two Guinness Records] On July 16, Geely officially launched the Thunder 16-in-1 intelligent electric drive, the most highly integrated mass-produced 800V high-voltage electric drive system in the world, which successfully secured two officially certified Guinness records. This breakthrough resolves the industry-wide technical challenge for high-performance BEV models, where strong power often leads to high energy consumption and energy efficiency limits performance, further refining the domestic layout of core EV technologies.

SMM Morning Brief: Overnight, LME copper opened at $13,740/mt, touched a high of $13,764/mt in early trading, then its price center consolidated lower toward the close, dipping to $13,560/mt, and finally settled at $13,566/mt, down 1.74%. Trading volume reached 20,000 lots, and open interest stood at 247,000 lots, up 1,022 lots from the previous trading day, reflecting an increase in bearish positions. Overnight, the most-traded SHFE copper 2609 contract opened at 105,100 yuan/mt, initially moved up to 105,290 yuan/mt, then its price center shifted straight down to hit a low of 104,310 yuan/mt, and afterwards moved sideways to eventually settle at 104,530 yuan/mt, down 1.4%. Trading volume totaled 67,600 lots, and open interest reached 212,000 lots, down 12,500 lots from the previous trading day, reflecting a reduction in bullish positions.

[SMM Weekly Survey on Aluminum Downstream: This Week, Aluminum Processing Operating Rate Dropped 0.2 Percentage Point to 61.1%, Off-Season Effect Deepens and Continues] Overall, as the off-season effect deepens, downward pressure on the industry's operating rate remains unabated. Export orders for aluminum plate/sheet and strip and aluminum foil provide some temporary support, while other sub-sectors are expected to remain in the doldrums in the short term.