The global overseas primary aluminum spot market faced overall downward pressure this week, with spot premiums in Japan, Southeast Asia, South Korea and the US all falling week-on-week. The Asian market was weighed down by weak downstream purchasing sentiment amid the traditional consumption off-season. Ample circulating supply stemming from concentrated cargo arrivals in the US compounded the bearish sentiment. Meanwhile, the LME curve briefly flipped into a Backwardation (B) structure this week. Elevated capital costs prompted traders to step up sell-downs, pushing spot offers lower across regions and dragging down transaction benchmarks. I. Weekly Comparison of Key Global Spot Premiums II. Regional Spot Transaction & Market Commentary (I) Asian Market: Sluggish Off-Season Buying, Wide Disparity Between Long-Term Benchmark QMJP and Spot Prices Japan Market Japan’s spot market remained sluggish this week, with downstream buyers only placing sporadic orders to meet immediate operational needs and no large-scale restocking activities. The Q3 QMJP benchmark price was set at USD 395/mt, sharply diverging from actual spot transaction prices ranging from USD 330–350/mt, resulting in steep discounts against the quarterly benchmark across the market. Southeast Asia, South Korea and Indonesia Spot premiums in Thailand and South Korea retreated in tandem as traders showed strong willingness to offload inventories. Overseas end-user demand for Indonesian primary aluminum stayed muted, while downstream players remained reluctant to accept high prices, driving down local ex-factory offers and concluded transaction prices. Across Asian trading channels, the temporary Backwardation structure on the LME aluminum curve, paired with higher capital costs and inventory pressure, encouraged holders to cut offers to liquidate stocks. Coupled with feeble downstream demand, spot prices faced additional downward pressure. (II) US Market: Concentrated Cargo Arrivals from Multiple Regions Weigh on Premiums Easier spot prices in Europe previously diverted some Canadian aluminum ingots to the US, alongside a portion of Indonesian primary aluminum shipments. Concentrated cargo arrivals boosted market supply substantially. Despite rigid underlying demand in the US, the surge in available supply kept DDP premiums under mild week-on-week downward pressure. III. Core Macro Drivers Shaping Overseas Spot Markets End-User Demand: Off-Season Drags on Asian Buying Sentiment Southeast Asia and Japan entered their traditional demand off-season. Downstream fabricators only purchased materials on an as-needed basis without proactive stockpiling, and market acceptable price levels kept sliding, leaving spot transactions without solid support. Trading Flows: High Capital Costs Fuel Traders’ Inventory Liquidation The temporary Backwardation structure on the LME aluminum curve lifted holding costs for metal traders. Most market participants opted to cut prices to sell stocks and recover capital, flooding the market with available material and further depressing spot premiums. IV. Brief Market Outlook In the near term, the off-season in Asia is far from over, and traders retain strong incentives to liquidate inventories, which will keep overseas primary aluminum spot premiums subdued. Market participants will closely monitor the commissioning timeline of Indonesian aluminum projects and restocking activities among overseas downstream manufacturers going forward.

The annual 500,000 mt aluminum plate/sheet and strip project of Shunbo Alloy (Phase II) fully entered the trial production stage in early July, with its hot rolling and cold rolling lines operating smoothly. Notably, the earlier-phase 630,000 mt slab ingot project has successfully achieved full capacity. Once the entire project reaches full production, the annual output value is expected to exceed 20 billion yuan.

Recently, the People's Government of Bairin Right Banner and Inner Mongolia Ningbang Supply Chain Technology Co., Ltd. signed an investment agreement. The project will be located in the Bairin Right Industrial Park, with a total investment of 1.25 billion yuan and fixed asset investment of 1.05 billion yuan. The first phase of the project will cover an area of 100 mu, with an additional 200 mu reserved for supporting facilities. It will build 10 intelligent secondary aluminum melting and refining production lines, with an annual output of 300,000 mt of high-grade secondary aluminum alloy ingots, and simultaneously construct rare and precious metal extraction and environmental protection facilities.

SMM, July 9: Raw material side: This week, trading in China's petroleum coke market was lackluster. The low-sulphur coke market sentiment improved, with prices edging up; mid- and high-sulphur coke saw sluggish downstream procurement, causing prices to drift lower, and the overall market price center shifted slightly downward. Specifically, this week, transaction prices for petroleum coke at CNOOC's Binzhou refinery edged up, Taizhou Petrochemical resumed operations, and the Zhoushan Petrochemical unit remained shut down for maintenance. For PetroChina, low-sulphur coke prices in north-east China consolidated on a strong note, while petroleum coke prices at Sinopec's refineries were largely stable. Local refineries saw moderate shipments, and petroleum coke prices fell under pressure. The latest SMM data showed the spot price index for 1# petroleum coke in north-east China at 4,289.63 yuan/mt, up 0.28% WoW; the spot price index for 2# petroleum coke in Shandong at 4,040.29 yuan/mt, down 0.67% WoW; the spot price index for 3# petroleum coke in Shandong at 3,665.89 yuan/mt, down 0.26% WoW; and the spot price index for 4# petroleum coke in Shandong at 1,868.08 yuan/mt, down 2.14% WoW. Supply side, refineries' concentrated maintenance in July gradually wrapped up, driving production resumptions. Coupled with high port inventories, overall market supply was relatively ample. Demand side, rigid demand from carbon used in aluminum production formed a floor, while purchasing enthusiasm from anode material enterprises improved slightly. In the near term, the divergence across petroleum coke grades is expected to persist, with the overall price center consolidating and drifting lower. This week, the coal tar pitch market held up well. As of Thursday, the average coal tar pitch price stood at 4,988 yuan/mt, up 2.33% WoW. Coal tar prices remained high in a stalemate, and the operating rate at deep-processing enterprises edged up, leading to a slight increase in supply. Downstream anode enterprises focused on rigid restocking at the start of the month; sellers and buyers continued their standoff. Raw material cost support persisted, but the supply growth from higher deep-processing operating rates and downstream resistance to high prices were capping further price rises. In the near term, coal tar pitch prices are expected to consolidate at highs, with limited upward momentum. Overall, this week, cost support for prebaked anode remained relatively firm. Supply side, prebaked anode enterprises maintained a production pace of producing based on sales. New anode projects in regions like Xinjiang and Guangxi gradually came online, continuing the release of new capacity. Meanwhile, operating rates at some enterprises pulled back slightly due to maintenance, but overall industry supply capability grew steadily, further enhancing supply elasticity. Demand side, China's operating aluminum capacity stayed high, providing stable, rigid support for prebaked anode consumption. Export orders, new aluminum projects in Indonesia continued to ramp up, driving a MoM improvement in anode export orders from China to South-east Asia. Geopolitical tensions in the Middle East eased somewhat, with previously affected aluminum enterprises gradually resuming production, which is expected to drive a recovery in anode procurement demand going forward. Overall, new domestic prebaked anode supply is being fulfilled consistently, high downstream aluminum operating rates effectively support domestic demand, and the export market showed marginal improvement. The industry's overall supply-demand balance remained steady, but with the continuous release of new capacity, supply growth slightly outpaced demand growth, intensifying the competitive landscape. Brief: This week, China's prebaked anode raw material market diverged, with limited fluctuations in overall cost. According to SMM monitoring, as of July 9, China's prebaked anode cost was approximately 5,497.67 yuan/mt, up 0.68% WoW. Cost side, the petroleum coke market continued its structural divergence, while coal tar pitch prices consolidated on a strong note. Overall raw material side support was moderate, with coal tar pitch contributing strength and petroleum coke acting as a divergent drag. Supply and demand, high domestic aluminum operating rates supported demand, and export orders improved marginally. However, with the continuous release of new capacity, industry competition intensified, and the pattern of supply growth slightly outpacing demand is likely to persist. Future focus should remain on the pace of new capacity additions and the cost-side divergence between petroleum coke and coal tar pitch.

Egypt plans to postpone any sale of a stake in state-owned EgyptAlum until ongoing expansion projects raise the company's value by three to four times. Key projects include a 300,000 tpy smelter expansion with Trafigura, a proposed alumina refinery and a new 600,000 tpy aluminum project. If completed, Egypt's total aluminum production capacity could reach around 1.2 million tonnes per year.

SMM, July 7: In the first half of 2026, geopolitical conflicts in the Middle East emerged as one of the decisive factors affecting electrolytic aluminum prices. Prior to the Middle East events, expectations of a US dollar rate-cut cycle were bullish for non-ferrous metal prices, and overseas electrolytic aluminum prices generally maintained a firm trend in January. However, high aluminum prices suppressed demand, compounded by the impact of the domestic Spring Festival holiday, leading to larger-than-expected domestic aluminum ingot inventory accumulation. In February, domestic and overseas aluminum prices fell in tandem. On February 28, the US-Israel coalition launched a military strike against Iran, officially marking the beginning of the Middle East geopolitical conflict's impact on aluminum prices. Middle East Geopolitical Conflict Triggers Production Cuts; Supply Gap Expectations Drive Up LME Aluminum Prices Affected by the US-Iran conflict, some aluminum smelters in the Middle East experienced production cuts. Combined with the Mozambique aluminum smelter entering shutdown in March, the market expected overseas electrolytic aluminum fundamentals to face a significant supply gap. Boosted by this, overseas aluminum prices continued to climb, with the LME 3M aluminum price reaching a near three-year high of $3,787.5/tonne on June 2. The timeline of production cuts at Middle East and Mozambique aluminum smelters is as follows. In addition, power and other infrastructure in Iran was damaged, making it difficult for local aluminum smelters to sustain production. However, with no official announcements yet, SMM has made its own production cut assessment. As of mid-April, SMM estimated that the total capacity affected by production cuts in the Middle East and Mozambique could reach approximately 3.5–4.0 million tonnes. Under the impact of significant production cuts, overseas electrolytic aluminum fundamentals shifted to a deficit, with total LME aluminum ingot inventory and Japanese port aluminum ingot inventory continuing to decline. As of end-June 2026, LME global aluminum ingot inventory stood at 302,000 tonnes, down 207,000 tonnes from end-2025. As of end-May, Japanese major port electrolytic aluminum inventory was 239,000 tonnes, down 78,000 tonnes from end-2025. Amid expectations of supply tightening, ex-China aluminum premiums strengthened. As of end-June, SMM Japan MJP aluminum ingot spot premium recorded $380/mt, up 123.5% from the end of last year, and SMM Japan Q3 MJP aluminum ingot premium recorded $395/mt, up $309/mt from Q4 2025, a jump of 359.3%. SMM Europe P1020A aluminum ingot duty-paid price recorded $547.5/mt, up 62.2% from the end of last year, while SMM Europe P1020A aluminum ingot duty-unpaid price recorded $470/mt, up 64.9% YoY. SMM US Midwest DDP aluminum premium recorded 110.5¢/lb, equivalent to around $2,435/mt, up 18.2% from the start of the year, an absolute increase of approximately $374.7/mt. Although supply tightened and aluminum ingot destocking took place, downstream purchasing enthusiasm was subdued by high prices, with actual transactions in Asia persistently at a discount to the Japan MJP aluminum ingot premium. Indonesia saw a concentration of new project startups; as new projects continued to ramp up production, supply increased, and since Q2, Indonesia aluminum ingot FOB prices showed a trend of pulling back slightly. As of end-June, SMM FOB Indonesia P0610A average price recorded $270/mt, up 92.9% from the end of last year, but down 8.8% from this year's high of $296/mt. SMM FOB Indonesia P1020A average price recorded $266/mt, up 97.0% YoY, but down 8.6% from this year's high of $291/mt. Aluminum premiums in other regions maintained an overall uptrend. As of end-June, SMM CIF South Korea P1020A average price recorded $342/mt, up 132.7% from the end of last year; SMM FCA South Korea P1020A average price recorded $362/mt, up 119.4% YoY; and SMM CIF Thailand P1020A average price recorded $328/mt, up 120.9% YoY. High Profits Accelerate Electrolytic Aluminum Restarts and New Project Commissioning Under high aluminum prices, electrolytic aluminum companies enjoyed substantial profits. These high profits stimulated some idled capacity to accelerate restarts and also catalyzed more new electrolytic aluminum projects, accelerating their commissioning. In the first half of the year, three electrolytic aluminum smelters resumed idled capacity to varying degrees, and two additional smelters announced plans to restart production in 2026. Details are as follows: San Ciprián smelter in Spain safely completed restart on April 8, with total capacity of approximately 230,000 tonnes/year, representing an increase of approximately 150,000–200,000 tonnes/year compared to 2025 operating capacity. Mount Holly in the United States began restart in April, with plans to reach full capacity by end-June, involving 50,000 tonnes/year of capacity. Grundartangi smelter in Iceland began restart in April, expected to complete restart by end-July, involving 210,000 tonnes/year of capacity. Magnitude 7 Metals planned to restart potline No. 1 cells at its New Madrid aluminum smelter in the United States, with plans to add 75,000 tonnes/year of primary aluminum capacity by end-2026. Norsk Hydro indicated that the Slovalco smelter in Slovakia planned to restart partial primary aluminum production in Q4 2026, involving 75,000 tonnes/year of capacity. Regarding new projects, according to SMM estimates, total planned commissioning capacity for overseas electrolytic aluminum in 2026 is approximately 2.3 million tonnes, of which approximately 700,000 tonnes have been commissioned, with the remaining 1.6 million tonnes expected to be commissioned in the second half of 2026. For details, please follow the "SMM Overseas Electrolytic Aluminum Project Monthly Review" series. Overall, although the Middle East and Mozambique experienced large-scale production cuts in the first half of the year, the acceleration of restarts and new project commissioning partially offset the supply reduction. According to SMM estimates, total overseas electrolytic aluminum production in H1 2026 was 14.397 million tonnes, down 4.1% year-on-year, and total overseas demand was 13.612 million tonnes, down 3.1% year-on-year. Since overseas electrolytic aluminum had a net inflow of approximately 1.234 million tonnes into the domestic market in H1, the overseas electrolytic aluminum deficit in H1 is estimated at approximately 450,000 tonnes. H2 Outlook: Middle East Restarts Combined with New Project Ramp-up Increase Supply, Putting Pressure on Aluminum Prices In June–July, the Middle East geopolitical situation showed no clear signals of further deterioration, and news of restarts emerged from Middle East aluminum smelters that had undergone production cuts. On July 2, EGA announced that its Al Taweelah plant had made progress in restart efforts: anode removal work for all electrolytic cells had been completed; cell cleaning was approximately 90% complete; and over 20% of solidified aluminum blocks inside cells had been cleared. On May 26, the first electrolytic cell was successfully restarted; as of July 2, 89 cells were in operation (out of a total of 1,262 cells), equivalent to approximately 110,000 tonnes of capacity. In addition, Aluminum Bahrain and Qatalum were also expected to gradually begin restarts. With Middle East restarts combined with continued ramp-up of new projects, the global electrolytic aluminum balance is expected to shift toward a surplus by Q4 2026.