[Mideast Situation Adds New Uncertainties, Aluminum Prices Continue in the Doldrums] The dispute over control of the Strait of Hormuz persists, and the resumption of navigation through the strait remains uncertain. The hawkish shift by the US Fed has boosted the US dollar index, weighing on nonferrous metal prices. Under macro headwinds, aluminum prices in and outside China have fallen. In the short term, bearish factors dominate, and aluminum prices are expected to continue in the doldrums.

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...

In the short term, high raw material prices provide solid cost support for aluminum fluoride, but bearish constraints from weak downstream fluorine chemicals and the decline in long-term hydrofluoric acid contracts are also in play. Amid the tug-of-war, aluminum fluoride prices in July have little room for significant rise or fall, and the market will continue to consolidate at highs within a range.

SMM June 30 news: According to SMM statistics, China's aluminum production in June 2026 (30 days) rose 2.2% YoY and fell 3.1% MoM. Although weak domestic demand dragged down various sectors broadly under pressure, export demand for aluminum semis provided effective support for domestic liquid aluminum consumption. The proportion of liquid aluminum edged up, rising by 0.7 percentage points MoM to 77.2%, slightly exceeding expectations at the start of the month. The core increment came from decent processing profits for some products, which boosted liquid aluminum demand. Based on SMM's liquid aluminum proportion calculation data, China's aluminum casting ingot output in June fell 3.8% YoY and 6.2% MoM. Capacity changes: As of June month-end, SMM statistics showed China's existing aluminum capacity at around 46.289 million mt, up 0.17% MoM. Production forecast: Entering July 2026, the aluminum price spread between in and outside China narrowed, squeezing arbitrage profits for aluminum semis exports. However, previously finalized export orders still required concentrated fulfillment, so overall aluminum semis export volumes remained underpinned. In addition, hefty processing profits at downstream fabricators boosted their willingness to purchase liquid aluminum directly. Overall, the proportion of liquid aluminum is expected to rise by 0.4 percentage points to 77.2%. [Data source statement: Except for public information, all other data are derived from public information, market communication, and SMM's internal database models, processed by SMM for reference only and do not constitute any decision-making advice.] Data source: SMM

SMM, June 30: According to SMM statistics, total aluminum production outside China in June 2026 fell 8.7% YoY, mainly due to earlier large-scale production cuts at aluminum smelters in the Middle East. Daily average production outside China rebounded 1.9% MoM, driven by production resumptions at smelters in the US and Iceland, as well as the production ramp-up of Indonesian projects and newly energized capacity. Looking ahead to July 2026, production resumptions at smelters in the US and Iceland are expected to continue advancing. Backed by high prices, more Indonesian aluminum projects are expected to be energized and start production, while earlier-commissioned new projects are expected to continue ramping up. The expanded capacity at India’s Balco is also expected to sustain its production ramp-up. In addition, the geopolitical situation in the Middle East has eased, with no further signs of deterioration. If the situation stabilizes gradually, the aluminum capacity in the region that has been cut or suspended is expected to begin resuming production step by step. Overall, in the near term, aluminum production outside China is expected to remain in negative YoY growth. As production resumptions and new ramp-ups continue, daily average aluminum production is expected to maintain positive growth. Going forward, announcements from aluminum smelters in the Middle East, Indonesia, and India will warrant close monitoring.

SMM, June 30 – On June 15, 2026, according to the National Development and Reform Commission (NDRC) website, the NDRC, the Ministry of Industry and Information Technology, the Ministry of Ecology and Environment, the State-owned Assets Supervision and Administration Commission of the State Council, the National Energy Administration, and other departments jointly issued the Notice on Launching a Three-Year Campaign for Energy Conservation and Carbon Reduction Upgrades in Key Industries . The notice's requirements for the electrolytic aluminum industry include: promoting large-scale reduction cells of 500 kA and above, and accelerating the upgrade of prebaked anode cells below 300 kA. SMM has compiled publicly available market information. Excluding idled capacity, as of June 2026, cells of 300 kA and below accounted for 16% of total domestic capacity, of which approximately 1.75 million tonnes of capacity already have publicly announced replacement or upgrade projects. It should be noted that the Notice on Launching a Three-Year Campaign for Energy Conservation and Carbon Reduction Upgrades in Key Industries does not yet mandate compulsory phase-out provisions regarding cell amperage requirements. Domestic electrolytic aluminum production is therefore not expected to be materially affected in the near term. Meanwhile, capacity replacement and upgrade projects across the domestic industry are progressing steadily, with replacement projects surfacing frequently. As of June 30, 2026, a total of 13 electrolytic aluminum capacity replacement projects had been publicly announced, of which 8 are upgrade and retrofitting projects. As of June 2026, capacity equipped with 500 kA and above cells accounted for 12.9% of the total, a share expected to rise further going forward. Of the 13 publicly announced projects, 11 plan to build 500 kA or 600 kA cells, representing 93.1% of total proposed capacity under replacement projects. SMM Commentary: Electrolytic aluminum output is unlikely to see significant near-term disruption. However, as replacement and upgrade efforts continue, power consumption per tonne of domestic electrolytic aluminum production is expected to decline further, helping the industry meet its energy conservation and carbon reduction targets.

[Strait of Hormuz Control Dispute Continues; Bearish Factors Dominate Short-Term Aluminum Prices] The Strait of Hormuz control dispute continues, and the resumption of navigation in the strait remains uncertain. The US Fed’s hawkish pivot boosted the US dollar index, and non-ferrous metal prices were suppressed. Under macro headwinds, aluminum prices in and outside China fell. In the short term, bearish factors dominate, and aluminum prices are expected to remain in the doldrums.

EGA (Emirates Global Aluminium) has successfully exceeded 400,000 mt/year of total secondary aluminum capacity across the UAE, Europe, and the US by adding capacity at its Al Taweelah recycling plant and planning to acquire the Italian aluminum recycling enterprise Eco Green. In addition, another 200,000 mt/year secondary aluminum capacity project is under construction in Europe and the US. On the acquisition front, EGA completed acquisitions of secondary aluminum plants in Germany and the US in 2024: EGA Light Metals Germany will expand its capacity to more than 6 times the original level and build a second site near Hannover, adding 150,000 mt/year of capacity, expected to be completed by 2028; EGA Spectro Alloys in Minnesota, US, plans to complete the first-phase expansion in 2025, adding 65,000 mt/year capacity, and add another 35,000 mt/year capacity in 2027. In addition, in April this year, EGA announced its intention to acquire an 80% stake in Italy's Eco Green, and this acquisition plan is currently pending regulatory approval.

[Destocking Accelerates to Provide Support, Export Concerns Limit Rebound Room] The US Fed's hawkish pivot boosted the US dollar index, weighing on nonferrous metal prices. The Middle East geopolitical situation has been somewhat volatile but shows no signs of deterioration. Under macro headwinds, aluminum prices in and outside China fell. In the short term, bearish factors dominate, and aluminum prices are expected to remain in the doldrums.

[SMM Aluminum Bulletin] Looking ahead, the continued release of new aluminum capacity in Southeast Asia and Northern Europe is expected to be the primary driver boosting anode export growth. May exports experienced a temporary pullback due to shifts in Southeast Asian procurement pace and declining demand from the Middle East, but the offsetting effect of new Southeast Asian capacity should not be overlooked. The probability of a near-term recovery in markets like the Middle East and Russia remains low, and exports are likely to fluctuate at lows. Overall, cumulative exports for the full year are still expected to maintain slight positive growth.