As of July 30, China’s aluminum ingot inventory in major consumption areas stood at 953,000 mt. Cumulative destocking from the YTD high of 1.465 million mt in early May has reached 512,000 mt (-35%), with an additional accelerated destocking of 53,000 mt this week, breaking below the 1 million mt threshold as expected. However, the directional divergence between warehouse withdrawals and inventory has raised concerns...

As of July 30, China's major consumption regions reported aluminum ingot inventory of 953,000 mt, having cumulatively destocked 512,000 mt (-35%) from the year's high of 1.465 million mt in early May. Within the week, destocking accelerated further by 53,000 mt, as expected falling below the 1 million mt mark. However, the directional divergence between warehouse withdrawals and inventory drew attention: weekly warehouse withdrawals pulled back to 127,700 mt, losing the advantage of being at a high for the same period in the past four years. The core driving force of this destocking round has shifted from "demand and warehouse withdrawal boost" in June to "supply contraction + slowdown in shipment pace": the proportion of liquid aluminum rose to 78.3% in July, with casting ingot volume down 15.1% YoY; a sharp drop in arrivals in South China pushed Foshan's premium wider by 50 yuan/mt in a single week to 115 yuan/mt; SMM believes...

SMM July 31: Today, the most-traded SHFE aluminum 2609 contract closed at 23,630 yuan/mt, up 45 yuan on the day, a gain of 0.19%. Trading volume was 139,967 lots, and open interest was 247,263 lots, down 3,338 lots day on day, with funds exiting and clear signs of both bulls and bears reducing positions to realize profits. The price held above the 5-day, 10-day, and 30-day moving averages but remained below the 60-day MA, with short-term bearish pressure continuing to ease. After a sharp decline earlier, the price consolidated at lows for repair, and on the day it shot up then pulled back to close slightly higher, with moderate bullish buying at lows. The 5-day and 10-day MAs turned upward, while the 30-day and 60-day MAs remained downward, leaving the medium-term downtrend unchanged. The 60-day MA above forms strong medium- and long-term resistance, limiting upside room, while the short-term MAs below provide solid support at lows. The DIF and DEA lines stayed below the zero axis, but bearish momentum shrank significantly, and the rebound momentum from lows continued, greatly easing overall downward pressure. SMM Commentary: Recently, the macro front improved somewhat, and the marginal constraints from rate hike expectations on the nonferrous metals sector continued to ease. China’s proportion of liquid aluminum kept rising, and the geopolitical risk premium from the Middle East along with continued destocking of domestic aluminum ingot provided a floor for aluminum prices, significantly boosting short-term market confidence. However, the continued rollout of aluminum capacity outside China in the long term, weak end-use demand in China, together with repeated changes in expectations for US Fed rate hikes and uncertainties in the Middle East, still put some pressure on aluminum’s upside room. Short-term aluminum prices are expected to consolidate on a strong note. Today, the most-traded alumina 2609 contract settled at 2,621 yuan/mt, down 27 yuan on the day, a decline of 1.02%. Trading volume was 185,860 lots, and open interest was 242,811 lots, down 6,081 lots MoM, with funds reducing positions and exiting. The price stayed below the 5-day, 10-day, 30-day, and 60-day MAs, with all MAs forming bearish pressure from top to bottom. Short-term bears continued to press, and the price hit a new low, with weak bullish buying at lows. All medium- and long-term MAs have turned from support to resistance, and the medium-term consolidation downward trend hasn’t changed. During any rebound repair phase, the price will face layered resistance from each moving average. SMM Commentary: On the supply side, weekly production was basically flat compared to the previous week, with stable operations, but the ample supply situation persisted, continuing to weigh on prices. On the inventory front, the buildup trend continued. In markets outside China, affected by geopolitical conflicts, large volumes of low-priced cargo flowed into China earlier, consuming overseas circulating inventory. Recently, the concentrated release of restocking demand from new capacity in Indonesia and production resumptions in the Middle East tightened overseas supplies from loose, driving a notable increase in ex-China alumina prices. Looking ahead, in the absence of macro bullish catalysts in China, the oversupply situation continues to pressure, and short-term prices are expected to remain in the doldrums. Additionally, expectations of production ramp-up in Guangxi will likely lead to further inventory buildup next week. [The information provided is for reference only. This article does not constitute direct advice for investment research or decision-making. Clients should make decisions prudently and not substitute this for independent judgment. Any decisions made by clients are unrelated to SMM.]

SMM July 31 news: SHFE aluminum 2608 contract traded near yesterday’s center in the morning session. Downstream users held back due to high aluminum prices, but just-in-time procurement emerged given the Friday restocking cycle. Persistent destocking also made some suppliers reluctant to sell at lower prices, though overall transaction prices shifted lower. Today, spot premiums for SHFE aluminum ranged mainly between 8-20 yuan/mt and flat against the August contract. In east China, the shipment sentiment index was 3.09, down 0.04 MoM, and the procurement sentiment index was 2.84, down 0.04 MoM. As SHFE aluminum posted a three-day winning streak approaching the Friday restocking cycle, downstream processing enterprises in central China showed markedly weaker stockpiling appetite; they mostly focused on just-in-time procurement and digesting inventories, with only a few enterprises considering stockpiling. Traders mostly took advantage of low premiums to purchase, but overall market activity remained sluggish. The final transaction price range in central China settled at a discount of 160-180 yuan/mt against the SHFE aluminum August contract. The shipment sentiment index in central China was 3.2, up 0.02 MoM, and the procurement sentiment index was 2.83, up 0.03 MoM. On the inventory front, aluminum ingot inventory in major consumption regions fell by 1,000 mt MoM, with destocking seen only in Gongyi.

According to SMM statistics, on July 30, aluminum billet inventory in major consuming regions in China stood at 119,500 mt, down 2,500 mt from last Monday and down 1,500 mt from last Thursday. The inventory ended its two-week buildup trend and shifted to slight destocking. On a YoY comparison basis, inventory was 27,500 mt lower than the same period in 2025, 9,700 mt lower than in 2024, but 40,600 mt higher than in 2023.

[Scrap Aluminum and Secondary Aluminum Weekly Review: Cost-Driven Price Strengthening, High-Temperature Holiday Drags Demand, ADC12 Gains Constrained] This week, ADC12 market prices first stabilized and then rose. SMM ADC12 prices held steady at 24,000 yuan/mt early in the week, were raised for two consecutive days mid-week driven by costs, and stood at 24,200 yuan/mt as of Thursday, up 200 yuan/mt from last Thursday. The cost side remained the core driver of this week's price increase.

The SEA secondary aluminum market remained mixed this week. Aluminum scrap prices were largely stable, while ADC12 remained under pressure due to weak downstream demand. Buying activity stayed cautious, although UBC scrap held firm on tighter supply and steady recycling demand. Market attention also shifted to the EU's Carbon Border Adjustment Mechanism (CBAM), with growing focus on carbon reporting, recycled content, and supply chain traceability as compliance requirements continue to evolve.

[SMM Aluminum Downstream Analysis: July Aluminum Processing PMI at 42.2%, All Segments Enter Contraction Territory; End-Use Demand Weakens, Export Divergence Hinders Near-Term Recovery] In July, the aluminum processing industry exhibited a pattern of broad-based off-season weakness across all segments with structural divergence. Only the new energy sector demonstrated demand resilience, while domestic demand in other sectors contracted broadly and significantly. Export performance was uneven, with aluminum wire and cable exports plummeting and dragging down the industry. Combined with raw material constraints, high-temperature production restrictions, and disturbances from price spread recovery, overall industry activity remains deeply mired in contraction territory, and near-term recovery momentum is insufficient.

[Marginal Easing in Expectations for US Fed Rate Hikes, Continued Aluminum Destocking Underpins Market] Based on a comprehensive assessment, the macro front has improved recently; marginal constraints from rate hike expectations on the nonferrous metals sector continue to ease; the proportion of liquid aluminum in China keeps rising; the Middle East geopolitical risk premium continues to accumulate, while aluminum ingot destocking continues in China, collectively underpinning aluminum prices; and market confidence has strengthened markedly in the short term. However, the continuous rollout of long-term aluminum capacity outside China, weak traditional end-use demand in China, coupled with recurring expectations for US Fed rate hikes overseas and disturbances from uncertainties in the Middle East geopolitical situation, still exert some pressure on the upside room for aluminum prices. In the short term, aluminum prices consolidate on a strong note.

SMM July 30: PV Aluminum Extrusion: This week, according to feedback from PV frame enterprises in the survey sample, industry operating rates remained stable overall. According to SMM, China’s module scheduled production was ~38.5 GW in July, and is expected to edge up MoM to 39.3 GW in August. Underpinned by stable-to-rising demand from downstream module production schedules, PV frame enterprises’ operating rates are expected to hold steady in the near term, with leading PV frame enterprises with long-term contract advantages maintaining high operating rates. Raw Material Prices: During the period (July 27–30, 2026), the SMM A00 weekly average price was 23,357.5 yuan/mt, up 0.8% from the previous week’s average. Overall, the continuous rise in the proportion of liquid aluminum in China, the persistent geopolitical risk premium in the Middle East, combined with sustained destocking of domestic aluminum ingots, jointly supported aluminum prices, visibly enhancing near-term market confidence. However, the continuous additions of forward aluminum capacity outside China, weak traditional end-use demand in China, together with ongoing fluctuations in expectations for US Fed interest rate hikes and uncertainty in the Middle East geopolitical situation, still pose certain pressure on aluminum price upside. In the near term, aluminum prices maintained a consolidation pattern on a strong note. Next week, the most-traded SHFE aluminum contract is expected to move in a range of 23,000–24,150 yuan/mt, and LME aluminum in a range of $3,100–3,250/mt.