[SMM Aluminum Express News] Magnitude 7 Metals will restart potline one at its New Madrid, Missouri aluminium smelter, bringing an additional 75,000 tpy of primary aluminium capacity online by the end of 2026. The American Primary Aluminum Association (APAA) welcomed the decision, noting that the restart, together with Century Aluminum’s Mt. Holly restart, could increase US domestic primary aluminium production by more than 20% while creating hundreds of manufacturing jobs and strengthening supply chain resilience.

Quebec aluminum smelters are continuing to operate at around 95% capacity with no reported layoffs despite higher US import tariffs. According to the Aluminum Association of Canada, the Trump administration’s decision to raise aluminum and steel tariffs from 25% to 50% initially resulted in losses of approximately USD600 million for Quebec producers after US customers resisted absorbing the additional costs. However, market conditions have since stabilized as aluminum originally destined for Europe was redirected to the US market to benefit from higher prices. Industry participants noted that global aluminum prices continue to rise, with further upside risks linked to ongoing geopolitical tensions in the Middle East, particularly the Iran crisis.

As resource security and decarbonization become increasingly important, major economies are strengthening efforts to retain aluminum scrap. From the EU's review of export controls and the U.S. strategic asset proposal to Japan's circular economy initiatives and policies in the UAE and South Africa, these developments could reshape global scrap flows and affect secondary aluminum markets.

Aluminum associations from the United States, Europe, Canada and Japan highlighted OECD data showing that global aluminum-sector subsidies totaled USD118.3 billion during 2005-2024, with China accounting for USD101.4 billion, or 86% of the total. In 2024 alone, China received USD10.2 billion of the sector’s USD11.1 billion global subsidies. Industry groups noted that China’s share of global primary aluminum output has risen from 11% to 61% over the past two decades, with subsidy-supported growth extending into downstream processing and recycling. The associations called for coordinated measures, including import monitoring systems, tariff alignment and potential scrap export restrictions, to strengthen supply-chain security and support fair competition.

Overall, macro perspective, the positive and mild signals from the US-China leaders' call have temporarily eased market tensions regarding trade friction expectations, improving risk appetite. The steady progress in the Eurozone's economic recovery has partially offset the pressure from the US's temporary economic weakness, presenting a generally neutral-to-positive global macro environment that offers a relatively stable external backdrop for commodity markets.

[SMM Cast Aluminum Alloy Morning Comment: The Most-Traded Contract Fluctuated with a Slight Decline Overnight, ADC12 Spot Premiums Widened] Yesterday, aluminum prices partially recovered from the previous day, with the SMM ADC12 price rising slightly by 50 yuan/mt to 21,100 yuan/mt. The current tight supply of aluminum scrap is unlikely to ease in the short term, providing solid cost support. Some enterprises have experienced a decline in operating rates due to raw material shortages or losses, while finished product inventories at plants remain low, leading to firm or actively rising quotations. Although demand has not shown significant improvement compared to September, it remains resilient overall, providing support for prices. However, high social inventory and warrant pressure may limit upside room, and attention should be paid to the impact of policy implementation on the supply side. In the short term, ADC12 prices are expected to hold up well, with a focus on raw material circulation, demand performance, and inventory changes.

【SMM Analysis】 Last week, the Aluminum Association (of America) released a white paper examining the flow of aluminium scrap of the United States, a sector that is starting to gain traction worldwide for its importance within the sectors and development goals of low carbon and circular sustainability goals, industrial competitiveness and strategic interests in national security. The white paper highlights several proposals made by the association, including the possible ban of UBC scrap exports from the USA totally.

According to data from the Aluminum Association, the estimated aluminum demand in the United States and Canada for the first quarter of 2025 is expected to reach 6.53 billion pounds (domestic producer shipments + imports), a decrease of 4.4% compared to 6.83 billion pounds during the same period last year. Due to companies increasing their import volumes ahead of the tariffs (which began imposing a 25% tariff on all steel and aluminum products imported into the U.S. starting March 12), North American imports of aluminum and aluminum products grew by 40.9% quarter-on-quarter.

The Japan Aluminum Association (JAA) announced that the shipment volume of aluminum can materials in Japan for the fiscal year 2024 (from April 2024 to March 2025) reached 382,000 tons, a year-on-year decrease of 2.4%. Among this, the volume for can body materials was 286,700 tons, an increase of 1.7% year-on-year; the shipment volume for can lids and pull tabs was 95,300 tons, a year-on-year decrease of 3.3%. According to the Ministry of Economy, Trade and Industry of Japan, the production and shipment volumes of aluminum beverage cans for fiscal year 2024 were 339,900 tons and 296,600 tons, a year-on-year decrease of 1.4% and 0.5%, respectively.

Canada is exploring the possibility of providing financial support to large aluminum producers affected by the US trade war, such as Rio Tinto. Jean Simard, CEO of the Aluminum Association of Canada, said on Saturday (July 5) that if the 50% tariff imposed by the US on aluminum imports persists in the medium term, this early discussion could benefit the industry. Simard pointed out that although the major aluminum producers operating in Canada currently have no liquidity issues, the persistence of a 50% US tariff would inevitably have financial implications. He stated that this discussion is part of a broader conversation, and "everything is possible," with no decisions having been made yet. Currently, about half of the aluminum used in the US comes from imports, with the vast majority originating from Canada. Last year, Canada exported 3.2 million mt of aluminum to the US. Simard's comments followed media reports late Friday that Canadian Industry Minister Mélanie Joly had said the government was in discussions with Rio Tinto about providing financial assistance to address the severe US tariffs.