Futures Market: On the previous trading day's night session, the most-traded SHFE aluminium 2509 contract opened at RMB 20,560 per tonne, with a high of RMB 20,795 per tonnes, a low of RMB 20,560 per tonne, and closed at RMB 20,770 per tonne, up 1.27 per cent from the previous close. LME aluminium opened at USD 2,589.50 per tonne, with a high of USD 2,638.50 per tonne, a low of USD 2,582.50 per tonne, and closed at USD 2,638 per tonne, up 1.89 per cent.
Macro: (1) Xie Shaofeng, Chief Engineer of the Ministry of Industry and Information Technology, stated at the State Council Information Office press conference on July 18 that a new round of steady growth work plans for ten key industries, including steel, non-ferrous metals, petrochemicals, and building materials, will be implemented to promote structural adjustments, optimise supply, and eliminate outdated capacity in key industries. Specific work plans will be released in the near future. (Bullish★) (2) US President Trump held talks with Indonesian President Prabowo and successfully reached an important agreement. As part of the agreement, Indonesia has committed to purchasing US energy worth up to USD 15 billion and US agricultural products worth USD 4.5 billion, while also importing 50 Boeing aircraft. In addition, the agreement stipulates that the US will impose a unified 19 per cent tariff on all imported Indonesian goods, while Indonesia will enjoy tariff-free and other non-tariff barrier preferences when importing US goods. (Neutral) (3) US Treasury Secretary Bentsen recently privately advised US President Trump that he should not attempt to fire Fed Chairman Powell. Bentsen warned that firing Powell could have economic, political, and legal consequences. (Neutral)
Fundamentals: (1) According to SMM statistics, as of July 21, China's domestic social inventory of primary aluminium was 498,000 tonnes, an inventory buildup of 6,000 tonnes from the previous Thursday. (Bearish★) (2) The latest data from the General Administration of Customs show that in June 2025, China's exports of unwrought aluminium and aluminium semis were 490,000 tonnes, down 19.8 per cent Y-o-Y; the cumulative exports from January to June were 2.92 million tonnes, down 8.0 per cent Y-o-Y. (Bearish★) (3) The latest statistics from the Ministry of Public Security show that in the first half of the year, the number of newly registered NEVs in China reached 5.622 million units, a 27.86 per cent increase from the same period in previous years. By the end of June, the nationwide ownership of NEVs had climbed to 36.89 million units. (Neutral)
Primary Aluminium Market: On the previous trading day's morning session, SHFE aluminium futures fluctuated at highs. Due to the price increase, downstream purchase intentions weakened significantly today, and transactions were concentrated among traders. However, variations in premiums and discounts emerged across regions. Specifically, in east China, the market still offered SMM +10 to +20 in the morning, with reduced shipments and relatively firm market prices. As the futures price center moved higher, downstream purchases weakened, with fewer transactions at a premium of RMB +20 per tonne, while deals at RMB +10 per tonne were more easily concluded. In the previous trading session, SMM A00 aluminium closed at RMB 20,700 per tonne, up RMB 130 per tonne from the prior session, with a premium of RMB 110 per tonne against the 2508 contract, an increase of RMB 10 per tonne from the previous day. In the central China market, transactions were mainly concluded at a discount of RMB 10 per tonne to SMM central China prices in early trading today, with the price center moving higher. Spot transactions in the previous session were moderate, and the price spread between Henan and Shanghai widened to RMB 140 per tonne. SMM central China prices stood at RMB 20,560 per tonne, at a discount of RMB 30 per tonne against the 2508 contract.
Recycled aluminium raw materials: Spot primary aluminium prices rose by RMB 130 per tonne from the previous session, with SMM A00 spot aluminium closing at RMB 20,700 per tonne, while the aluminium scrap market generally followed the upward trend. Amid the current off-season, downstream scrap utilisation enterprises saw weak order releases, with purchases mainly driven by rigid demand. In the previous session, baled UBC scrap prices were concentrated at RMB 15,250-15,750 per tonne (excluding tax), and shredded aluminium tense scrap prices ranged between RMB 15,900-17,400 per tonne (excluding tax).
According to feedback from secondary aluminium enterprises, secondary aluminium alloy prices remain sluggish. Although scrap recycling poses challenges, constrained by poor operating rates, upside room for prices is also limited. This week, the aluminium scrap market is expected to follow bearish expectations for aluminium prices, with the overall price center likely to decline further. Undersupply of raw materials will provide medium and long-term support for aluminium scrap prices, but weak off-season demand will continue to cap upside room. Shredded aluminium tense scrap remains resilient due to tight supply, with prices expected to fluctuate rangebound between RMB 15,600-17,200 per tonne. Baled UBC scrap faces persistent downward pressure amid weak off-season demand, with prices potentially testing RMB 15,000-15,500 per tonne.
Secondary aluminium alloy: On the futures market, the most-traded cast aluminium alloy 2511 contract opened at RMB 19,810 per tonne in the previous session. By midday close, the contract hit a high of RMB 19,950 per tonne and a low of RMB 19,810 per tonne, settling at RMB 19,905 per tonne, up RMB 60 per tonne or 0.30 per cent from the previous close, with longs leading the increase in positions. In the spot market, SMM A00 aluminium prices rose by another RMB 130 per tonne to RMB 20,700 per tonne on Friday, while SMM ADC12 prices increased by RMB 100 per tonne to RMB 20,100 per tonne. Aluminium prices extended gains further in the previous session, and amid tight supply, aluminium scrap prices followed suit, directly pushing up the cost of recycled aluminium raw materials. Most secondary aluminium producers raised offers by RMB 100 per tonne, with the market showing active follow-up sentiment. However, actual consumption remained sluggish, and downstream purchasing enthusiasm was moderate. Overall, short-term cost support from aluminium scrap for secondary aluminium prices is strengthening, but weak demand coupled with high social inventory levels will limit upside room for prices of ADC12 and other secondary aluminium alloys.
Summary: Macro-wise, uncertainties surrounding overseas tariff policies and rumors of personnel changes continue to keep risk assets cautious. Domestically, industrial metals rose driven by policies against "rat race" competition. Fundamentals-wise, with supply increments being released and consumption in the off-season, the expectation of inventory buildup remains strong. Aluminium prices are expected to fluctuate at highs in the short term. Subsequent attention should be paid to casting ingot volumes and inventory changes.
Note: This article has been issued by SMM and has been published by AL Circle with its original information without any modifications or edits to the core subject/data.
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