Futures Market: Last night, the most-traded SHFE aluminium 2508 contract opened at RMB 20,300 per tonne, with a high of RMB 20,310 per tonne, a low of RMB 20,240 per tonne, and closed at RMB 20,270 per tonne. The trading volume was 40,000 lots, and the open interest was 251,000 lots. Last night, LME aluminium opened at USD 2,569.5 per tonne, with a high of USD 2,570.5 per tonne, a low of USD 2,556 per tonne, and closed at USD 2,559 per tonne.
Macro: (1) Israel and Iran have agreed to a comprehensive ceasefire! The Supreme National Security Council of Iran issued a statement announcing a ceasefire with "Israel and its supporters." (Bearish ★) (2) Fed Chairman Powell stated in his congressional testimony that the Fed is currently in a favourable position to be patient and wait for a clearer understanding of the economic trajectory before considering adjusting its monetary policy stance. However, he did not rule out the possibility that the impact of tariffs on inflation might be less than expected or the possibility of an earlier interest rate cut. US President Trump again called on Powell, stating that the Fed should cut interest rates by at least 2 to 3 percentage points. (Neutral ★) (3) The central bank and six other departments jointly issued the "Guidance on Financial Support for Boosting and Expanding Consumption," proposing 19 key measures in six aspects: supporting the enhancement of consumption capacity, expanding financial supply in the consumption sector, tapping and releasing residents' consumption potential, promoting the improvement of consumption supply efficiency, optimising the consumption environment, and ensuring policy support. (Bullish ★)
Fundamentals: (1) According to SMM statistics, as of June 24, the inventory of aluminium ingots in Guangdong was 154,000 tonnes; in Wuxi, it was 109,000 tonnes; and in Gongyi, it was 65,000 tonnes. The total inventory in these three locations was 328,000 tonnes, an increase of 4,000 tonnes from the previous trading day. (Bearish ★) (2) According to SMM statistics, regarding the inventory of aluminium billets in two domestic locations, the inventory of aluminium billets in Guangdong was 64,200 tonnes, and in Wuxi, it was 19,500 tonnes, totaling 84,000 tonnes, a decrease of 200 tonnes M-o-M. (Bearish ★) (3) According to the latest data from the General Administration of Customs, from January to May 2025, China's cumulative imports of unwrought aluminium and aluminium semis were 1.67 million tonnes, down 6.9 per cent Y-o-Y. Among them, the imports of unwrought aluminium and aluminium semis in May were 350,000 tonnes, up 14.7 per cent Y-o-Y and down 5.4 per cent M-o-M. (Neutral ★)
Primary Aluminium Market: Yesterday morning, the center of the front-month SHFE aluminium contract fell to around RMB 20,350 per tonne. The futures market pulled back slightly, and market inquiries increased, but actual transactions still revolved around long-term contracts. The spot market was relatively sluggish, with transactions occurring at a discount of RMB 10 per tonne against SMM. Yesterday, SMM A00 aluminium was reported at RMB 20,540 per tonne, down RMB 110 per tonne from the previous trading day, and at a premium of RMB 150 per tonne against the 07 contract, down RMB 10 per tonne from the previous trading day. In the central China market, under the off-season atmosphere, aluminium processing enterprises are increasingly cutting production. The market is mainly dominated by long-term contract transactions, with few spot orders being concluded. During the day, the center of aluminium prices fell. Processing material enterprises saw a slight increase in just-in-time procurement, but the volume was limited. The market concluded transactions at a discount of RMB 20 per tonne against the SMM average price. SMM A00 aluminium in central China against the SHFE aluminium 2507 contract was recorded at RMB 20,360 per tonne, down RMB 110 per tonne from the previous trading day. The price difference between Henan and Shanghai was – RMB 180 per tonne, unchanged from the previous trading day, and it was at a discount of RMB 30 per tonne against the 2507 contract.
Secondary aluminium raw materials: Yesterday, spot primary aluminium prices fell by RMB 110 per tonne from the previous trading day. SMM A00 spot aluminium closed at RMB 20,540 per tonne, and the overall aluminium scrap market prices pulled back. During the traditional off-season, downstream scrap utilisation enterprises have weak order releases, with procurement mainly driven by just-in-time needs. Yesterday, the concentrated quotes for baled UBC aluminium scrap were in the range of RMB 15,200-15,700 per tonne (tax not included), and the concentrated quotes for shredded aluminium tense scrap were in the range of RMB 15,800-17,300 per tonne (tax not included). By region, Shanghai, Jiangsu, Shandong, and other places closely followed aluminium price movements, with price adjustments in the range of RMB 50-100 per tonne. Jiangxi region showed a clear attitude of refusing to budge on prices, with no price adjustments occurring for three consecutive trading days. By product, since last Thursday, baled UBC has followed the downward trend of aluminium prices, with a cumulative adjustment of RMB 150-200 per tonne. In terms of the price difference between A00 aluminium and aluminium scrap, the price difference between A00 aluminium and mechanical casting aluminium scrap in Shanghai narrowed by RMB 35 per tonne from last Wednesday to RMB 1,823 per tonne, and the price difference between A00 aluminium and mixed aluminium extrusion scrap free of paint in Foshan narrowed by RMB 112 per tonne from last Wednesday to RMB 1,486 per tonne.
Secondary aluminium alloy: In the spot market, the SMM ADC12 price remained stable at RMB 19,900-20,100 per tonne yesterday. Suppressed by the traditional off-season, demand side performance was weak, and market transactions were sluggish. The lack of growth in terminal orders inhibited the upward movement of ADC12 prices, compounded by the impact of low-priced supply, intensifying market competition. However, the cost side was relatively firm, providing some support to prices. It is expected that under the deepening impact of the off-season, ADC12 prices will remain in the doldrums in the short term, and close attention should be paid to changes in raw material circulation and signs of marginal improvement in demand. In the import market, the CIF quotes for imported ADC12 remained in the range of USD 2,430-2,470 per tonne, and the imported spot price remained around RMB 19,200 per tonne, with the instantaneous loss from imports still in the range of RMB 700-800 per tonne. The local tax-not-included quotes for ADC12 in Thailand were concentrated at 82-83 Thai baht/kg.
Summary: On the macro front, the ceasefire between Israel and Iran has alleviated geopolitical risks, reducing the demand for capital risk aversion, which is short-term bearish for aluminium prices. US Fed Chair Powell's neutral stance, coupled with potential interest rate cut expectations and pressure from Trump, may boost the economy, providing support to aluminium prices. The PBOC and six other departments jointly issued a document to stimulate consumption, which is bullish for terminal aluminium demand. On the fundamental side, the operating capacity of domestic electrolytic aluminium remained stable, with the proportion of liquid aluminium staying high, and the market supply of casting ingots remained tight. Demand side, overall, most downstream sectors were in the traditional off-season. Feedback on production cuts in the downstream sector in central China was evident, with weak spot cargo transactions and a continuous large discount in market transaction prices. The weakening off-season demand in the PV and home appliance sectors cannot be ignored, with a significant pullback 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 cycle and high aluminium prices. Inventory side, the destocking rate slowed, and low inventory levels still provided support to the futures market. On Monday this week, inventory buildup was observed, and it is necessary to monitor whether the inflection point of destocking has officially formed. However, spot premiums/discounts gradually pulled back. Overall, in the short term, aluminium prices are under pressure from inventory accumulation and easing geopolitical tensions. However, medium-term macro policies (such as domestic consumption stimulus and expectations for US Fed interest rate cuts) may boost demand. It is expected that aluminium prices will be in the doldrums in the short term, and subsequent focus should be 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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