[SMM Cast Aluminum Alloy Morning Comment: Cost–Demand Tug-of-War, ADC12 Prices to Move Sideways in the Short Term] Last Friday night, the aluminum alloy 2610 contract opened at 23,170 yuan/mt. After a brief dip early in the night session, bearish momentum faded, and prices consolidated, rebounded, and recovered. Late in the session, it held up well, closing at 23,245 yuan/mt, up 0.48%.

[ADC12 Price Daily Review: Costs Shift Lower, Demand Weak, ADC12 Quotes Continue to Move Lower] Today, ADC12 market quotes were generally lowered by 200 yuan/mt. The price reduction was mainly driven by the pullback in aluminum prices, the subsequent decline in aluminum scrap prices that pushed costs lower, and a weaker cast aluminum alloy futures market, leaving cost-side support somewhat weakened.

[Liquidity Tightening Concerns Ease Marginally, Aluminum Prices Stay Under Pressure at Highs in Near Term] Overall, on the macro front, US PPI and core PPI for July both declined YoY, coming in below both expectations and previous readings. Inflationary pressure eased further, and market expectations for a US Fed rate hike in September were scaled back, marginally easing concerns over liquidity tightening. On the fundamentals front, aluminum ingot inventories continued to destock, but destocking was expected to slow down in the second half of the month. The pace of production resumptions at Middle Eastern aluminum smelters was faster than the market had previously expected, and the supply-tightness premium priced in earlier faced pressure to unwind. Although macro recovery and continued destocking in the first half of August supported stronger aluminum prices, market sentiment shifted, and aluminum prices are expected to remain under pressure at high levels in the near term, with upside room likely to be capped to some extent by production resumption expectations.

[SMM Cast Aluminum Alloy Morning Comment: Futures Pullback Weighs on Spot; Cost Support Limits Downside Room] Yesterday, aluminum alloy market quotes were broadly lower, with the SMM ADC12 price lowered by 200 yuan/mt. The futures pullback further dampened spot market sentiment, and enterprises generally followed by lowering their quotes. The downstream sector is still in a demand off-season, with some enterprises still on high-temperature holidays or operating at reduced loads. End-user orders and procurement demand are weak, and the spot market lacks sustained upward momentum. However, the cost side still provides some support, as aluminum scrap prices remain relatively high overall and enterprises have limited room to cut prices further. The market lacks demand drivers on the upside, while the downside is constrained by costs. In the short term, ADC12 prices are expected to continue to consolidate within a range.

August 13, 2026: This week, the operating rate of China's leading downstream aluminum processing enterprises was 59.9%, down 0.2 percentage points WoW. The industry remained in the traditional consumption off-season; with high temperatures and weak end-use demand weighing on activity, most sectors were broadly under pressure. The primary aluminum alloy operating rate edged down 0.2 percentage points to 58%; weakening automobile production and higher aluminum prices curbed downstream purchases, new spot orders were extremely limited, and the sector remained in the doldrums. The aluminum plate/sheet and strip operating rate was unchanged at 69.0%; construction sheets & plates stockpiling expectations were not realized, can stock and automotive sheet orders were stable, and after concentrated export deliveries the market returned to real demand, leaving little upward driver in the short term. The aluminum wire and cable operating rate rose 0.4 percentage points to 62.4%; improved domestic-to-overseas price ratios slightly opened the export window, but limited new orders and slow State Grid cargo pick-up provided only mild support. The aluminum extrusion operating rate fell 0.8 percentage points to 50.8%; high temperatures shortened working hours and higher aluminum prices raised costs. Both construction and industrial extrusion weakened, and afternoon suspensions in south-west China further dragged output. The aluminum foil operating rate was unchanged at 70.1%; demand was weak during the air-conditioner end-user maintenance period, mid-month inventory built up, and enterprises mainly controlled production schedules and destocked; an inflection point in operating rates remains to be seen. The secondary aluminum operating rate edged down 0.3 percentage points to 49.1%, a low for the same period in recent years; tight compliant aluminum scrap, tax invoice uncertainty, and disruptions from high temperatures and typhoons made near-term improvement difficult. Overall, with the off-season constraint persisting and high-temperature disruptions, industry operating rates remained at low levels. In the short term, each segment is expected to stay mostly weak but stable, while aluminum wire and cable may move sideways due to the phased opening of the export window. Primary aluminum alloy: This week, the operating rate of China's leading primary aluminum alloy enterprises was 58%, down 0.2 percentage points WoW, continuing the weak operating trend. At present, the market was still in the traditional consumption off-season. According to CAAM data, China's automobile production in June was 2.37 million units, down 240,000 units MoM, and overall production in July and August is still expected to remain at low levels. Automobile consumption demand continued to weaken, clearly dragging on the primary aluminum alloy market. At the industry level, enterprise production schedules were still dominated by annual long-term contracts; new spot orders were extremely limited, overall orders edged down slightly from earlier, and overall operating rate fluctuations were relatively small. Meanwhile, the aluminum price center shifted somewhat higher during the week, further denting downstream purchasing sentiment; inquiry and spot transaction activity cooled noticeably, the trading atmosphere was subdued, and this placed some restraint on operating rates. Overall, the market lacked clear positive drivers in the short term; enterprises mostly stayed on the sidelines with limited willingness to ramp up production on their own initiative. Leading enterprises' operating rates are expected to hold at current levels next week, continuing the weak operating pattern. Aluminum plate/sheet and strip: This week, the operating rate of leading aluminum plate/sheet and strip enterprises was unchanged WoW at 69.0%. In terms of orders by product, the construction sheets & plates industry had not yet warmed up; as of this week, there was no concentrated stockpiling, and the industry lacked confidence that the August off-season to peak-season transition period would lift consumption. Orders on hand for hot-rolling downstream products such as can stock, automotive sheet, and 3C materials were relatively stable. The aluminum plate/sheet and strip operating rate is expected to recover in late August. In exports, after concentrated delivery of export orders received in Q2, the market gradually returned to real demand levels. In the short term, August stockpiling expectations have not yet been realized, and the demand side lacks drivers for substantive improvement; operating rates are expected to remain low and stable. Aluminum wire and cable: This week, the operating rate of China's aluminum wire and cable industry was 62.4%, up 0.4 percentage points WoW. During the week, thanks to improved domestic-to-overseas price ratios, the export window for aluminum stranded wire opened slightly, and some enterprises received a small number of new orders again, providing some support to operating rates. However, profit margins in this window were limited, overall new order sizes were small, and it was difficult to return to the previous high export prosperity level; the boost was mild. Domestically, State Grid cargo pick-up remained slow, and with the industry in the consumption off-season, domestic demand was generally weak and lacked strong support. Overall, neither domestic nor external demand showed clear improvement. The aluminum wire and cable industry is likely to mainly move sideways in the short term, with limited room for operating rates to rise or fall. Aluminum extrusion: This week, the weekly operating rate of China's aluminum extrusion industry was 50.8%, down 0.8 percentage points WoW. This week, the weak demand pattern in construction extrusion did not improve. Under persistently high temperatures, downstream construction site working hours were shortened, and purchase demand for construction extrusion declined further. Recently, aluminum prices drifted higher, raising raw material costs; downstream processing producers turned more cautious in procurement and maintained a purchase-as-needed strategy. On the supply side, some enterprises actively controlled the volume of engineering construction extrusion orders to optimize cash flow and took a prudent approach to new project orders. As multiple bearish factors compounded, the operating rate of the construction extrusion segment continued to move lower this week. In industrial extrusion, new orders for industrial motor housings, machinery equipment parts, and general industrial extrusion products declined, dragging the industrial extrusion operating rate slightly lower. In addition, some enterprises in south-west China reported that recent high temperatures were severe, workshop temperatures in the afternoon were too high, and work had to be suspended in the afternoon for rest, so overall output in August will decline. Overall, the short-term fundamentals of high-temperature disruptions and weak end-use demand in the off-season have not yet improved. Under the combined pressure of these two factors, operating rates in the aluminum extrusion industry will continue to weaken in the near term. Aluminum foil: This week, the operating rate of leading aluminum foil enterprises was unchanged WoW at 70.1%. At the enterprise operation level, the market was in the traditional off-season stage of consolidating at lows. Some aluminum foil producers reported that August sales completion rates were low, mid-month inventory build-up pressure was relatively large, and controlling production schedules and prioritizing destocking remained their primary strategy. In terms of order structure, air-conditioner end-users were in a period of large-scale summer equipment maintenance, providing little additional support to overall operating rates in the short term. Overall, deep weakness in air-conditioner foil and the packaging off-season effect remained the dominant factors, and as operating rates had already fallen to a relatively low level, the inflection point in operating rates remains to be seen. Secondary aluminum: This week, the operating rate of leading enterprises in the secondary aluminum industry edged down 0.3 percentage points WoW to 49.1%, still at a low level for the same period in recent years. On the raw material side, compliant aluminum scrap supply was tight, enterprise procurement cost pressure was relatively large, and tax invoice policy uncertainty continued to constrain raw material purchases and production. On the demand side, the market was still in the end-use consumption off-season, downstream order release was insufficient and mainly rigid demand, and enterprises showed weak willingness to schedule production. In addition, high temperatures and typhoon-related rainstorms disrupted production in some regions, further limiting production release. Under the combined impact of raw material constraints, off-season demand, and weather disruptions, the operating rate is expected to remain low in the short term. Going forward, attention will focus on the recovery of end-use orders and changes in tax invoice policy.

[Aluminum Scrap and Secondary Aluminum Weekly Review: High Raw Material Support and Off-Season Inventory Buildup Coexist; Secondary Aluminum Price Range Under Pressure] This week, China's aluminum scrap market prices moved sideways and consolidated, tracking primary aluminum trends. The price difference between A00 aluminum and aluminum scrap widened again as aluminum scrap struggled to catch up. On August 13, SMM A00 spot aluminum prices closed at 24,120 yuan/mt, up 320 yuan/mt from last Thursday.