According to SMM statistics, domestic aluminium production in June 2025 (30 days) increased by 1.57 per cent Y-o-Y and decreased by 3.23 per cent M-o-M. The operating capacity of domestic aluminium in June saw a slight M-o-M change. SMM learned that the phase II replacement project of an aluminium smelter in Shandong, which will be relocated to Yunnan, has commended. The plant in Shandong is required to shut down corresponding capacity for the replacement project and pass checks before being allowed to commission pots at its new plant in Yunnan.
In June, the proportion of liquid aluminium at domestic aluminium smelters continued to rise, up 0.1 percentage points M-o-M to 75.8 per cent. The increase was smaller than expectations at the start of the month, mainly due to high alloy inventory at downstream facilities and increased casting ingot production at some smelters. The proportion of liquid aluminium is expected to pull back in July. Based on SMM's data on proportion of liquid aluminium, domestic aluminium casting ingot production in June decreased 12.77 per cent Y-o-Y to around 872,500 tonnes.
Capacity changes: As of month-end June, SMM statistics showed China's existing aluminium capacity at approximately 45.69 million tonnes (SMM adjusted the figure in late April by eliminating double calculations after taking into account capacity replacement and old plant dismantling). Operating capacity stood at around 43.83 million tonnes. The operating rate edged down M-o-M due to capacity replacement programmes. SMM learned that the Shandong-to-Yunnan replacement project required the old smelter to complete production cuts and pass inspection before new pots could be started at the new facility. SMM will continue tracking aluminium capacity changes.
Production forecast: In July 2025, domestic aluminium operating capacity will maintain high levels. Yunnan's second batch of replacement projects will commence operation, boosting the industry operating rate. No progress has been made in other projects. Weakening end-use demand and significant inventory buildup of intermediate alloy products, coupled with production cut news from Qinghai and central China, may force upstream smelters to increase casting ingot output, potentially pulling the proportion of liquid aluminium back to around 74 per cent. Future attention should focus on proportion of liquid aluminium trends, alloy product 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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