In late July, China's aluminum billet processing fees have continued to pull back from their highs in June, with φ120 aluminum billet processing fees in some major consumption areas approaching the production cost line. Amid weakening marginal demand during the off-season, increased arrivals in South China, and a relatively stable center in aluminum prices, whether processing fees can hold firm near the cost line has become the core issue of market focus....

[SMM Analysis: Aluminum Billet Processing Fees Pull Back to Near Production Cost Line – Can They Hold Firm?] Entering late July, China’s aluminum billet processing fees have continued to pull back from June highs, with φ120 aluminum billet processing fees in some key consumption areas approaching the production cost line. The market is feeling the dual pressure of holding prices firm and making shipments. According to SMM’s latest data, as of July 23, social inventory of aluminum billets in China’s key consumption areas climbed to 121,000 mt, marking two consecutive weeks of inventory buildup. Over the same period, warehouse withdrawals fell to 33,000 mt, a clear WoW pullback. Against a backdrop of weakening off-season demand, increased arrivals in South China, and relatively stable aluminum price centers, whether processing fees can stabilize near the cost line has become the core issue the market is watching.

A delegation from Shanghai Metals Market (SMM) paid a visit to Xingfa Aluminium's Vietnan factory — Xingfa Vietnam, on July 20, 2026, and both sides engaged in-depth discussions covering the aluminum pricing mechanism in Vietnam, building international credibility, and coordinated industrial development. The delegation includes Logan Lu, SMM CEO, Kexin Lou, Director of Aluminum Fabrication, Lexi Chen, Key Account Manager for Overseas Information Sales, and CHIN KHAI YUEN, Senior Overseas Aluminum Analyst. Pushing for the Establishment of Globally Recognized Aluminum Price Benchmark in Vietnam During the visit, both sides analysed the current pricing landscape in Vietnam’s aluminum market. At present, Vietnam lacks internationally recognized aluminum price benchmark of its own. Foreign trades are mostly settled in US dollars based on LME plus MJP premiums, while domestic deals convert USD prices into Vietnamese Dong. Local players, including Chinese, Japanese, South Korean and Vietnamese enterprises, typically conclude contracts via LME + premium/discount pricing or fixed-price agreements before currency conversion. This fragmented pricing structure raises transaction costs and hinders the internationalisation of Vietnam’s aluminum sector. SMM noted that developing a widely accepted Vietnam aluminum pricing benchmark is critical to boosting pricing transparency and facilitating cross-border trade, and ranks high on SMM’s work agenda. To this end, SMM will conduct extensive surveys on major aluminum manufacturers in Vietnam, including Xingfa. SMM will officially launch the SMM Vietnam Aluminum Prices alongside a detailed methodology briefing at the SMM AICE 2026 Southeast Asia (Vietnam) Aluminum Conference in Ho Chi Minh City on 19–20 November . The two parties also exchanged views on primary aluminum supply and demand across Southeast Asia and the impacts of CBAM on the aluminum industry. In particular, CBAM and international carbon certification have emerged as core concerns for global aluminum participants. SMM will host a dedicated session at the AICE 2026 Southeast Asia (Vietnam) Aluminum Conference and invite international experts to share their insights. Deepening Southeast Asian Footprint: SMM Accelerates Market Rollout in Vietnam Since the beginning of this year, SMM has accelerated the establishment of its price service system in the Southeast Asian market. As of July 3, 2026, SMM has added a series of Southeast Asian 6063 aluminum billet processing fee price points and CIF Southeast Asia premium price points, with the Vietnam 6063 (non-homogenized) aluminum billet processing fees and price points already officially launched. In addition, the Vietnam Metal Recycling Forum (VMRF) visited SMM's headquarters in Shanghai on July 10, where the two parties reached multiple cooperation agreements on recycled metals industry chain services. Through localized collaboration and international resource integration, SMM is providing more accurate and authoritative data support for the aluminum industry chain in Vietnam and Southeast Asia. During this visit to Xingfa, the two parties reached multiple consensuses on aluminum price data collection, marketing promotion, and industry event organization. SMM stated that it will invite more international participants—including representatives from the Middle East, Indonesia, Malaysia, RUSAL, and Australian aluminum smelters—to jointly participate in the development of Vietnam aluminum pricing, promoting regional market integration. This survey has further deepened the strategic cooperation between SMM and Xingfa Aluminium and has also injected new momentum into the standardization and internationalization of Vietnam's aluminum pricing system. About Xingfa Aluminium Founded in 1984, Guangdong Xingfa Aluminium Co., Ltd. is a leading large-scale enterprise specialising in aluminum extrusion products in China. In 2011, Guangxin Holdings Group acquired a stake in Xingfa Aluminium, pioneering mixed ownership between state-owned and private capital within China’s aluminum extrusion sector and ushering in a new phase of steady expansion. Xingfa now operates nine production bases. In China, seven modern facilities are located in Sanshui and Nanhai (Foshan), Foshan Precision Manufacturing, Yichun (Jiangxi), Chengdu (Sichuan), Qinyang (Henan) and Huzhou (Zhejiang). Its global production network covers Australia and Vietnam, with growing scale advantages. Xingfa focuses on R&D, production and sales of aluminum extrusions across building and industrial segments. Its construction aluminum extrusions are widely used in high-end architectural curtain walls and system windows. While consolidating its core business, the company has expanded vigorously into industrial aluminum products, developing high-performance items such as new energy vehicle battery trays, crash beams and bus body components. Its products serve diverse sectors including rail transit, new energy vehicles, photovoltaics and electronics. Xingfa is further extending advanced aluminum processing technology into emerging areas such as energy storage and computing infrastructure. In recent years, Xingfa Aluminum has adhered to the principle that manufacturing is the foundation, fully leveraging its leading and driving role as the “chain leader” enterprise in Guangdong’s 100-billion-level high-end aluminum extrusion industry chain. Focusing on breakthroughs in key core technologies, it has promoted the industry chain and value chain towards the mid-to-high end. The company has successively received numerous honors, including the National Manufacturing Single Champion Enterprise, National Intellectual Property Demonstration Enterprise, National Technological Innovation Demonstration Enterprise, National Enterprise Technology Center, and National Green Factory. In 2025, Xingfa Aluminium ranked 475th in the Top 500 Chinese Manufacturing Enterprises, 147th in the Top 500 Guangdong Enterprises, and 32nd in the Top 500 Guangdong Manufacturing Enterprises. Join the Conversation at SMM AICE 2026

[Strait Blockade Threat Escalates, Aluminum Prices Remain in Consolidation and Wait-and-See Mode] According to comprehensive predictions, the situation in the Middle East remains volatile, market concerns about interest rate hikes persist, supply continues to recover, but the destocking trend is difficult to reverse in the short term. Amid the tug-of-war between longs and shorts, aluminum prices are expected to consolidate and adjust in the near term. Going forward, close attention should be paid to the progress of production resumptions and the trend of geopolitical conflicts in the Middle East, LME aluminum ingot inventory changes, and downstream processing orders in China.

[Full-Scale US-Iran War Risks Climb, Strengthening Short-Term Upward Drivers for Aluminum Prices] Overall assessment suggests that with the volatile Middle East situation, persistent market concerns over interest rate hikes, and continuously recovering supply, the destocking trend will be hard to reverse in the short term. Amid the tug-of-war between longs and shorts, aluminum prices are expected to consolidate and adjust in the near term. Going forward, close attention should be paid to the progress of production resumptions in the Middle East, the trajectory of geopolitical conflicts, LME aluminum ingot inventory changes, and the status of China’s downstream processing orders.

[Mideast Situation Remains Volatile and Uncertain, Aluminum Prices Consolidate and Adjust] Overall, the Middle East situation remains volatile, market concerns over interest rate hikes persist, and supply continues to recover. However, the destocking pattern is difficult to reverse in the short term. Amid the tug-of-war between longs and shorts, aluminum prices are expected to consolidate and adjust in the near term. Going forward, close attention should be paid to the progress of production resumptions and the trend of geopolitical conflicts in the Middle East, changes in LME aluminum ingot inventories, and the condition of downstream processing orders in China.

[Destocking Pattern Hard to Reverse in Short Term, Aluminum Prices Consolidate and Adjust in Short Term] Overall, geopolitical tensions in the Middle East remain volatile, market concerns over interest rate hikes persist, and supply continues to recover, but the destocking pattern is hard to reverse in the short term. Under the tug-of-war between longs and shorts, aluminum prices are expected to consolidate and adjust in the near term. Going forward, close attention should be paid to the progress of production resumptions in the Middle East and the trends of geopolitical conflicts, LME aluminum ingot inventory changes, and China’s downstream processing orders and aluminum semis export data.

[Downstream Off-Season Demand Remains Weak, Geopolitical Conflicts Support Aluminum Price Consolidation] Overall assessments indicate that the situation in the Middle East remains volatile, market concerns over interest rate hikes persist, and supply continues to recover. However, the destocking pattern is hard to reverse in the short term. Amid the tug-of-war between longs and shorts, aluminum prices are expected to consolidate and adjust in the near term. Going forward, close attention should be paid to the progress of production resumptions in the Middle East and the trend of geopolitical conflicts, LME aluminum ingot inventory changes, as well as China's downstream processing orders and aluminum semis exports data.

[SMM Aluminum Weekly: Macro and Fundamentals Intertwined, Short-term Aluminum Prices Expected to Consolidate and Adjust ]

[SMM Analysis: Glimmer of Hope amid Weak Supply and Demand: Review of China's Aluminum Billets Market in H1 2026 and Outlook for H2] In H1 2026, China’s aluminum billets market, squeezed by wild swings in aluminum prices and a slow recovery in end-use demand, underwent a turbulent journey from deep pressure to staged repair...