Futures Market: On Friday, the most-traded SHFE aluminium 2508 contract opened at RMB 20,425 per tonne, with a high of RMB 20,465 per tonne, a low of RMB 20,400 per tonne, and closed at RMB 20,425 per tonne. Trading volume was 56,000 lots and open interest was 248,000 lots. On Friday, LME aluminium opened at USD 2,525 per tonne, with a high of USD 2,564 per tonne, a low of USD 2,513 per tonne, and closed at USD 2,561.5 per tonne. Trading volume was 13,000 lots, and open interest was 3,000 lots.
Macro: (1) Fed Governor Waller: Interest rate cuts could potentially occur as early as the July meeting. Fed's Barkin: Current data does not show an urgent need for interest rate cuts. Fed's Daly: Economic fundamentals are moving in a direction that may require interest rate cuts. (Neutral ★)
(2) Trump: The US military conducted air strikes on three major Iranian nuclear facilities, including Fordow, and Iran must immediately agree to end the war. Iranian Foreign Minister: Nuclear facilities can be rebuilt even if destroyed, and technical knowledge "cannot be bombed away." (Bullish ★)
Fundamentals: (1) According to SMM statistics, as of June 23, SMM's social inventory of primary aluminium ingots in China was 464,000 tonnes, an increase of 15,000 tonnes from last Thursday on a WoW basis. (Bearish ★)
(2) There have been no changes to the policy of expanding the scope of the trade-in policy for consumer goods. The progress of subsidy fund utilisation is in line with expectations, and central government funds will be disbursed in the third and fourth quarters. (Bullish ★)
(3) According to customs data, China's exports of aluminium plate/sheet and strip in May 2025 were 278,900 tonnes, up 0.5 per cent MoM and down 4.4 per cent YoY. China's exports of aluminium foil in May 2025 were 121,300 tonnes, down 0.5 per cent MoM and down 6.8 per cent YoY. (Neutral ★)
Primary Aluminium Market: On Friday morning, due to low aluminium ingot inventory and continued destocking, the price centre of SHFE aluminium shifted upwards. However, against the backdrop of the off-season, actual demand remained weak, and the futures market pulled back. The spot market saw slightly improved trading due to weekend stockpiling demand, but downstream purchase willingness remained low.
In east China, the market offered at +5 RMB per tonne above the SMM average price in the morning. Due to weak off-season demand, market quotes and transactions were mostly concentrated at parity with the SMM average price.
On Friday, SMM A00 aluminium was reported at RMB 20,720 per tonne, down RMB 50 per tonne from the previous trading day, with a premium of RMB 180 per tonne against the 07 contract, unchanged from the previous trading day.
In central China, due to weekend stockpiling demand, market trading improved slightly in the morning, with spot premiums holding steady. The spot market was at parity with the SMM central China average price, and the price spread with east China held steady.
On Friday, SMM central China A00 aluminium was recorded at RMB 20,560 per tonne against the SHFE aluminium 2507 contract, down RMB 50 per tonne from the previous trading day. The price spread between central China and east China was RMB 160 per tonne, unchanged from the previous trading day, with a premium of RMB 20 per tonne against the 2507 contract.
Secondary Aluminium Raw Materials: Last Friday, spot primary aluminium prices fell by RMB 50 per tonne compared to the previous trading day, with SMM A00 aluminium closing at RMB 20,720 per tonne. The overall aluminium scrap market prices pulled back. As the off-season in June progresses halfway, downstream scrap utilisation enterprises are experiencing weak order releases, with procurement mainly driven by immediate needs.
Last Friday, the concentrated quotes for baled UBC aluminium scrap ranged from RMB 15,350-15,850 per tonne (tax excluded), while shredded aluminium tense scrap quotes were concentrated at RMB 15,800-17,300 per tonne (tax-exclusive prices).
Regionally, Shanghai, Jiangsu, Shandong, and other regions closely followed aluminium price movements, with price adjustments ranging from RMB 50-100 per tonne.
In Henan, Foshan, Guizhou, and other regions, price adjustments lagged behind aluminium price movements, with prices remaining flat MoM.
By product, both baled UBC and shredded aluminium tense scrap prices pulled back by RMB 100 per tonne MoM. Considering the difficulty in actual shipments, aluminium scrap suppliers adopted a cautious wait-and-see attitude towards price adjustments amidst aluminium prices fluctuating at highs.
Secondary Aluminium Alloy: Last Friday, SMM A00 aluminium prices fell by RMB 50 per tonne from the previous trading day to RMB 20,720 per tonne, while domestic SMM ADC12 prices decreased by RMB 50 per tonne to RMB 19,900-20,200 per tonne.
Amidst the continued decline in aluminium prices, market quotes diverged, with some enterprises actively lowering quotes due to sluggish demand, while others remained firm due to cost pressures.
Overall, the rigid cost support and weak off-season demand continued to clash, leading to ADC12 prices fluctuating rangebound. As the off-season deepens, it is expected that ADC12 prices will remain in the doldrums in the short term, requiring continuous attention to raw material circulation and marginal fluctuations in off-season demand. \
In the import market, CIF quotes for imported ADC12 remained stable at USD 2,420-2,450 per tonne, while imported spot prices decreased by RMB 100 per tonne to around RMB 19,200 per tonne, with immediate import losses slightly expanding to the RMB 600 per tonne range. Local ADC12 quotes in Thailand remained stable at 82 Thai baht/kg (tax excluded).
Summary: On the macro front, there was a clear divergence in statements from US Fed officials regarding interest rate cuts, with geopolitical conflicts elevating market bullish sentiment. On the fundamental front, domestic primary aluminium operating capacity remained stable, with the proportion of liquid aluminium maintaining high levels, and market casting ingot volumes remaining tight. SMM learned that individual aluminium plants slightly increased casting ingot volumes this week, but it remains difficult to change the overall tight market casting ingot supply.
On the demand side, overall, most downstream sectors are in the traditional off-season, with significant production cuts feedback in the downstream sector in central China, weakening local spot transactions, and persistent large discounts in market transaction prices.
From the perspective of downstream demand sectors, the weakening off-season demand in the PV and home appliance sectors cannot be ignored, with a significant decline in the operating rates of related sectors. The wire and cable sector experienced a decline in operating rates due to the completion of the previous delivery period and high aluminium prices.
In terms of inventory, the destocking pace has slowed, with low inventory still providing support to the futures market, but spot premiums and discounts have gradually pulled back. Overall, the domestic favourable macro environment remains unchanged.
On the fundamental side, the low inventory of domestic aluminium ingots provides support for aluminium prices. However, the weakening of downstream demand during the off-season is evident, and spot premiums/discounts may fall back from highs. Going forward, it is necessary to focus on changes in inventory and demand.
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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