SMM

[SMM Aluminum Morning Meeting Summary: New Round of Tariff Hikes Implemented, Aluminum Prices to Remain Under Pressure in the Short Term] From the macro perspective, the US has implemented a new round of tariff hikes, involving major trading partners such as Canada and Brazil. The escalation of trade barriers has heightened concerns about global economic growth, negatively impacting the demand outlook for industrial metals. Although domestic manufacturing data shows structural optimization, the market remains cautious about the effectiveness of subsequent policy stimulus. On the supply side, domestic operating aluminum capacity remains stable, with the proportion of liquid aluminum pulling back and an increase in casting ingot volume, leading to more marketable supplies and a continuous buildup of social inventory, which suppresses aluminum price increases. On the cost side of the aluminum industry, costs remained stable during the week, with no significant changes in the raw material segment. However, with the center of aluminum prices moving downward, the industry's average profit margin narrowed by approximately 149 yuan/mt. On the demand side, the off-season atmosphere persists downstream, with spot purchases made as needed and spot premiums struggling to rise. The PV, NEV, and home appliance sectors remain in the off-season. Despite the decline in aluminum prices, there has been no significant improvement trend in the orders on hand at processing plants. In terms of inventory, according to SMM statistics, on August 4, domestic social inventory of electrolytic aluminum stood at 564,000 mt, an increase of 20,000 mt from Thursday last week. Against the backdrop of the off-season, the expectation of inventory buildup remains strong. Overall, domestically, the favorable macro atmosphere remains unchanged, and the "anti-rat race" sentiment has dissipated. Attention will now turn to the impact of the Sino-US negotiation results. On the fundamental side, with the release of supply increments and the suppression of consumption during the off-season, the expectation of inventory buildup remains strong. Spot premiums and discounts are expected to remain weak, and aluminum prices are anticipated to remain under pressure. Subsequent focus should be on changes in inventory and demand.