In June the aluminum processing industry exhibited a pronounced divergence pattern of "external demand outperforming domestic demand, with the aluminum wire and cable industry unable to sustain the market on its own." Export orders, energy storage, UHV, and other areas provided structural support, but a combination of weak domestic consumption, wild swings in aluminum prices, and policy disruptions made it difficult for the overall industry sentiment to recover markedly in the short term.

[SMM Aluminum Morning Meeting Minutes: Capital Inflows Coupled With Expectations of Supply Tightening, SHFE Aluminum's Strong Rising Momentum Continues] The end of the prolonged US federal government shutdown eliminated an external economic uncertainty risk, slightly easing market sentiment. Domestically, the core positive factor lies in the comprehensive strengthening of October's leading economic indicators, with offline consumption heating up, especially the dual increase in infrastructure operating rates and workload MoM, indicating resilient consumption in aluminum downstream sectors such as construction extrusions and industrial profiles. Furthermore, although the full exemption of NEV purchase tax is about to end, major automakers are funding "bottom-guarantee" sales promotions themselves, which will stimulate front-load orders in the short term, providing a pulse-like boost to aluminum demand for automotive materials. Overall, the current macro front is filled with positive sentiment, and fundamentals side, overseas supply is expected to tighten, giving capital bullish momentum. Significant capital inflows into SHFE aluminum futures provide further upward momentum for aluminum prices; the most-traded SHFE aluminum contract broke through 22,000 yuan/mt. Bear funds remain on the sidelines, awaiting an opportunity to enter. However, domestic fundamentals do not provide sufficient support for aluminum prices to sustain further sharp gains. The proportion of liquid aluminum already pulled back this week, and persistently high prices are expected to suppress end-use consumption. Downstream processors' sentiment for purchasing spot cargo remained weak this week. Subsequent monitoring of downstream operating conditions is necessary. In the short term, the pattern of aluminum prices fluctuating at highs remains unchanged.