Since late April, aluminum billet processing fees in China's three major consumption regions staged a strong rebound, with South China taking the lead. Processing fees of φ120 aluminum billets (Guangdong) hit a Q2 low of -40 yuan/mt on April 16, then surged rapidly, approaching the 500 yuan/mt mark by month-end in May, and reaching a new yearly high of 490 yuan/mt on May 28. SMM believed there were three main reasons...

According to SMM statistics, on May 28, aluminum billet inventory in China's major consumption regions fell to 181,500 mt, a significant destocking of 24,000 mt WoW, successfully pulling back below the 200,000 mt threshold. Warehouse withdrawals during the week climbed to 58,900 mt, up 3,200 mt WoW, hitting a new periodic high.

In May, China's aluminum fabrication industry recorded an overall PMI of 50.8%, barely staying above the 50 mark but pulling back significantly by 3.1 percentage points from April. Industry sentiment slid from the edge of expansion territory toward the critical threshold, with structural divergence intensifying further.

Iron ore futures strengthened with a fluctuating trend today. The most-traded contract I2609 closed at 783.5 yuan/mt, up 0.45% from the previous trading session. Port spot prices edged up by 3-5 yuan from the previous day. Traders showed moderate enthusiasm in offering prices; steel mills purchased as needed; with the weekend approaching, the overall market trading atmosphere was sluggish. The transaction price of PB fines at Shandong ports was 754 yuan/mt. The transaction price of PB fines at Caofeidian Port was 760 yuan/mt, and the transaction price of Jimblebar fines was 723 yuan/mt. Today, SMM's 35-port inventory continued destocking, but the magnitude had narrowed significantly. The risk of inventory buildup is continuously increasing after entering June. Additionally, rising coke prices squeezed steel mill profits, continuing to weigh on iron ore prices. Meanwhile, end-use demand further weakened due to weather impacts, and market sentiment tilted toward pessimism. Under these combined influences, iron ore prices are expected to maintain a fluctuating trend within a narrow range, with the upper and lower bounds remaining unchanged.

This week, the operating rate of China's leading downstream aluminum processing enterprises was 64.1%, down 0.3 percentage points WoW.

【SMM Aluminum Brief】According to the latest SMM data, the Shandong 2# petroleum coke spot price index was recorded at RMB 4,203.64/mt, up 0.52% from last Thursday; the Shandong 3# petroleum coke spot price index stood at RMB 3,752.45/mt, up 0.87%; and the Shandong 4# petroleum coke spot price index reached RMB 2,000.6/mt, up 4.02%.