SMM

[SMM Aluminum Morning Meeting Summary: Peak Season Nears with Marginal Consumption Improvement, Aluminum Prices Find Support but Face Resistance at Highs] Macro front, expectations for US Fed interest rate cuts intensified and China's policy stimulus boosted domestic demand, creating an overall favorable sentiment that may enhance aluminum consumption prospects. However, the transmission of domestic policy support to actual consumption still requires time. Supply side, with the commissioning of limited replacement capacity, operating capacity saw a modest increase, while production edged up slightly. The proportion of liquid aluminum is expected to rebound in September. Cost side, the weekly total cost for the aluminum industry showed minimal change, with high industry profits remaining intact. Demand side remains the core focus for the market ahead. As the September-October peak season approaches, downstream operating rates displayed stronger recovery signs last week, with aluminum extrusion and plate/sheet, strip and foil sectors showing varying degrees of growth. Entering early September, current consumption only exhibits marginal improvement, and effective inventory destocking still needs time to materialize. However, total inventory remains relatively low, and some secondary aluminum enterprises in Anhui and Jiangxi provinces have received notices on the termination of tax rebate policies, posing risks of declining capacity utilization rates for scrap utilization enterprises, which provides some support for primary aluminum consumption. During the traditional September peak season, aluminum prices are more likely to rise than fall overall, but resistance at highs persists. For aluminum prices to effectively break through the key resistance level of 21,000 yuan/mt, the market needs to witness the realization of consumption expectations during the September-October peak season, validated by subsequent domestic aluminum ingot destocking inflection points and sustained strength in downstream operating rates.