The Material Recycling Association of India (MRAI) has urged the government to abolish the 2.5% Basic Customs Duty on aluminum scrap, arguing that the move would reduce raw material costs, improve the competitiveness of recyclers and downstream manufacturers, and strengthen the circular economy. The association noted that India imports 80-85% of its aluminum scrap demand and that secondary aluminum now accounts for around 35% of the country's total aluminum consumption.

[Expectations for US Fed Interest Rate Hikes Delayed, Short-Term Weakness in Aluminum Prices Hard to Break] In China, the proportion of liquid aluminum continued to rise, and warehouse withdrawals of aluminum ingots hit a four-year high in the past week. The further acceleration of the destocking pace has been the biggest highlight recently, but the absolute inventory level remains in a high range. Recently, with the continued narrowing of the geopolitical risk premium coupled with expectations for new project startups outside China, macro headwinds still dominate. LME aluminum is under significant pressure in the short term, and domestic aluminum prices are expected to follow LME aluminum and remain in the doldrums.

[SMM Aluminum Weekly Review: Macro Headwinds Remain Dominant; Short-term Aluminum Prices Need More Support]

In 2026, China's aluminum ingot inventory has continuously pulled back from a high of 1.465 million mt in early May, and by end-June cumulative destocking of 300,000 mt brought it down to 1.165 million mt, with the destocking pace steepening markedly. Last week, warehouse withdrawals surged to 170,000 mt, hitting a new single-week high in nearly four years. Driven by three factors—the supply-side proportion of liquid aluminum rising more than expected, supportive export demand, and...

SMM, June 30: According to SMM statistics, in June 2026 (30 days), China’s aluminum production rose 2.2% YoY but fell 3.1% MoM. Although weak domestic demand dragged down various sectors generally under pressure, export demand for aluminum semis provided effective support for domestic liquid aluminum consumption. The domestic proportion of liquid aluminum edged up, with the liquid aluminum share rising 0.7 percentage points MoM to 77.2% in the month, slightly outperforming expectations at the beginning of the month. The core increase came from attractive processing margins for some products, which boosted demand for liquid aluminum. Based on SMM’s liquid aluminum proportion calculations, China’s aluminum casting ingot volume in June fell 3.8% YoY and 6.2% MoM. Capacity changes: As of end-June, SMM estimated China’s existing aluminum capacity at approximately 46.289 million mt, up 0.17% MoM. Production forecast: Entering July 2026, the price spread between aluminum in and outside China narrowed, squeezing arbitrage profits on aluminum semis exports. However, previously finalized export orders still need to be concentrated for fulfillment, providing a floor for overall aluminum semis exports. Additionally, downstream processors’ attractive processing margins are driving up their willingness to purchase directly supplied liquid aluminum. Overall, the proportion of liquid aluminum is expected to rise 0.4 percentage points to 77.6%. [Data source statement: All data other than public information are processed by SMM based on public information, market communication, and SMM’s internal database models, for reference only and do not constitute decision-making advice.] Data source: SMM

I. Japan Market This week, Japan MJP aluminum ingot spot premiums showed a continuous downtrend, with the average price at $384/mt on June 19 pulling back to $380/mt by June 26. Although premiums kept dipping, some traders lowered their offers proactively while others held prices firm. The demand side exhibited restocking for rigid demand, with downstream enterprises purchasing as needed. Short-term restocking activity was moderate, but there was no large-scale concentrated stockpiling, and overall purchasing volume was mild. Currently, the market trading pace is slowing down, spot lacks a trend-driven upward driver in the short term, and premiums follow the futures to stay in the doldrums. II. US Market This week, US Midwest DDP aluminum spot premiums edged up, from an average of $110.2/mt on June 19 to $110.35/mt this Friday. US market fundamentals still provided support: two major demand-side increases were being released, with aluminum semis demand for AI computing data centers surging, coupled with the concentrated commissioning of new production lines at NEV manufacturers such as Tesla, steadily boosting aluminum consumption for automotive lightweighting, keeping the digestion pace of domestic aluminum ingots high. The supply side faced constraints, with Middle East geopolitical disturbances disrupting ocean shipments of aluminum ingots, arrivals growth from outside China consistently lagging downstream demand growth, and domestic inventory continuing to destock, supporting premiums to stay high. However, the pressure logic for the outlook is gradually emerging: LME aluminum prices have already fallen to a staged low, cross-regional arbitrage windows remain open, and arrivals of aluminum ingots flowing into the US market will gradually increase. Coupled with this week’s premiums having stopped rising and weakened slightly, the tight supply-demand situation will marginally ease as external supply replenishes. It is anticipated that US spot premiums will stay high but face pressure going forward, with upside room essentially capped and a pullback adjustment possible. III. Thailand Market This week, Thailand spot premiums rose from $320/mt last Friday to $323/mt this Friday. Affected by the decline in aluminum prices, some traders raised their offers. However, the upside momentum was weak, and the trading atmosphere remained sluggish. Local downstream users only maintained a hand-to-mouth purchase pattern for rigid demand, with low willingness for large-scale stockpiling. Meanwhile, continuous arrivals of aluminum semis exports from China, with large volumes of low-priced fabricated products flowing into the Southeast Asian end-use markets, directly diverted import orders for primary aluminum ingots and significantly squeezed local aluminum demand. [Data source statement: Other than publicly available information, all data are based on public information, market communication, and SMM's internal database models, and are processed by SMM. For reference only, and do not constitute decision-making advice.] Data source: SMM