In June, the increase in the proportion of liquid aluminium in aluminium production exceeded expectations, and it is expected to edge up in July

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According to SMM statistics, China's aluminium production in June 2026 (30 days) rose 2.2 per cent Y-o-Y and fell 3.1 per cent M-o-M. Although weak domestic demand dragged down various sectors broadly under pressure, export demand for aluminium semis provided effective support for domestic liquid aluminium consumption.

The proportion of liquid aluminium edged up, rising by 0.7 percentage points M-o-M to 77.2 per cent, slightly exceeding expectations at the start of the month. The core increment came from decent processing profits for some products, which boosted liquid aluminium demand. Based on SMM's liquid aluminium proportion calculation data, China's aluminium casting ingot output in June fell 3.8 per cent YoY and 6.2 per cent M-o-M.

Capacity changes: As of June month-end, SMM statistics showed China's existing aluminium capacity at around 46.289 million tonnes, up 0.17 per cent M-o-M.

Production forecast: Entering July 2026, the aluminium price spread between in and outside China narrowed, squeezing arbitrage profits for aluminium semis exports. However, previously finalized export orders still required concentrated fulfilment, so overall aluminium semis export volumes remained underpinned.

In addition, hefty processing profits at downstream fabricators boosted their willingness to purchase liquid aluminium directly. Overall, the proportion of liquid aluminium is expected to rise by 0.4 percentage points to 77.2 per cent.