Futures: On Thursday night session, the most-traded SHFE aluminium 2509 contract opened at RMB 20,710 per tonne, with a highest price of RMB 20,785 per tonne, a lowest price of RMB 20,705 per tonne, and closed at RMB 20,760 per tonne. Trading volume was 43,000 lots, and open interest was 198,000 lots. On Thursday, LME aluminium opened at USD 2,606 per tonne, with a highest point of USD 2,627.5 per tonne, a lowest point of USD 2,606 per tonne, and closed at USD 2,624 per tonne.
Macro: (1) Announcement by the People's Bank of China: To maintain ample liquidity in the banking system, on August 15, 2025, the People's Bank of China will conduct RMB 500 billion outright reverse repo operation through fixed quantity, interest rate tendering, and multiple price winning bids, with a term of 6 months (182 days). (Bullish ★) (2) The US Bureau of Labor Statistics announced on Thursday that the Producer Price Index (PPI) for final demand in the US rose by 0.9 per cent M-o-M in July, after being flat in June. Economists had previously forecast a 0.2 per cent increase in PPI. (Bullish ★)
Fundamentals: (1) According to SMM statistics, as of August 14, the aluminium billet inventory in major domestic consumption areas was 138,500 tonnes, down 8,500 tonnes from Monday and 4,000 tonnes from last Thursday. (Bullish ★) (2) This week, the operating rate of the domestic aluminium extrusion industry increased by 1 percentage point M-o-M to 50.5 per cent. The comprehensive operating rate of sampled enterprises increased slightly, mainly due to new orders for automotive and PV extrusions from some enterprises. (Bullish ★)
Primary aluminium market: On Thursday, the centre of SHFE aluminium prices pulled back to sideways movement within the RMB 20,650-20,690 per tonne range. In the first trading session of Thursday in Shanghai and Henan, suppliers offered goods at a small premium, with increased shipments, but actual transactions were not as good as earlier. Specifically, in east China, in the morning spot market, sellers mainly quoted at SMM+10, and later transactions were concluded at SMM+10. The demand for long-term contract purchases remained, but as shipments increased, transactions were not as smooth as the previous trading day. On Thursday, the purchasing sentiment for electrolytic aluminium in east China was 2.88, and the selling sentiment was 2.71 (historical data can be queried in the database). On Thursday, SMM A00 aluminium was reported at RMB 20,710 per tonne, down RMB 50 per tonne from the previous trading day, with a premium of RMB 10 per tonne against the 2508 contract, narrowing by RMB 30 per tonne from the previous trading day. In the central China market, transactions on Thursday were average. Pre-market transactions were mainly on par with SMM central China. After the market opened, premium quotes emerged, but actual transactions were concentrated at a premium of RMB 10 per tonne against SMM central China. The price spread between Henan and Shanghai remained stable at RMB 110 per tonne. On Thursday, SMM central China was reported at RMB 20,600 per tonne, with a discount of RMB 100 per tonne against the 2508 contract. On Thursday, the purchasing sentiment for electrolytic aluminium in central China was 2.90, and the selling sentiment was 2.81 (historical data can be queried in the database).
Recycled aluminium raw materials: On Thursday, the price of primary aluminium spot decreased by RMB 50 per tonne from the previous trading day. SMM A00 spot aluminium closed at RMB 20,710 per tonne, and the aluminium scrap market price remained stable overall. Currently in the traditional off-season, downstream scrap utilisation enterprises are experiencing weak order releases, with purchases primarily driven by immediate needs. On Thursday, the centralised quoted price for baled UBC aluminium scrap ranged from RMB 15,500 to 16,000 per tonne (tax-exclusive), while the centralised quoted price for shredded aluminium tense scrap (with water content) ranged from RMB 17,100 to 17,600 per tonne (tax-exclusive price). The prices of baled UBC, shredded aluminium tense scrap (with water content), and automotive and motorcycle wheel hubs remained unchanged compared to the previous day. Regarding the price difference between A00 aluminium and aluminium scrap, the price difference between A00 aluminium and mixed aluminium extrusion scrap free of paint in Foshan narrowed by RMB 60 per tonne from the previous day to RMB 1,912 per tonne, while the price difference between A00 aluminium and mechanical casting aluminium scrap in Shanghai increased slightly by RMB 4 per tonne from the previous day to RMB 1,945 per tonne. It is expected that the price centre of the aluminium scrap market will move further upward next week. Affected by the transitional period of policies related to secondary aluminium, this will drive up the prices of raw material purchases. The tight supply of shredded aluminium tense scrap (with water content) resources will intensify, with the operating range expected to fluctuate between RMB 17,100 and 17,600 per tonne (tax-exclusive). Supported by the consumption of downstream can stock enterprises, the operating range of baled UBC is expected to be between RMB 15,500 and 16,000 per tonne (tax-exclusive).
Secondary aluminium alloy: On the futures market, on Thursday, the most-traded cast aluminium alloy futures contract 2511 opened at RMB 20,175 per tonne, reaching a high of RMB 20,195 per tonne and a low of RMB 20,080 per tonne, before closing at RMB 20,140 per tonne, down RMB 60 per tonne or 0.30 per cent from the previous trading day. The open interest was 8,312 lots, and the trading volume was 1,639 lots, with bulls reducing their positions mainly during the day. In the spot market, on Thursday, the SMM A00 aluminium price fell by RMB 50 per tonne from the previous day to RMB 20,710 per tonne, while the SMM ADC12 price remained stable at RMB 20,350 per tonne. Today, aluminium prices dropped back slightly, and the secondary aluminium market remained largely stable amid high costs. In the short term, cost support and policy disruptions may continue to support prices fluctuating upward, but weak demand and inventory buildup pressure will limit upside room. It is necessary to monitor the implementation of policies and the pace of demand recovery during the peak season.
Summary: On the macro front, although Thursday's US data did not shake the rationale for an interest rate cut in September, it did raise market concerns that tariffs could still stimulate inflation in the coming months and alter the interest rate cut trajectory for the remainder of the year. From a fundamental perspective, there have been relatively small changes in terms of supply, with the operating production of electrolytic aluminium showing a steady and slight increase. Regarding costs, the total weekly cost for the electrolytic aluminium industry was RMB 16,738 per tonne, with the industry still enjoying high profits. On the demand side, as the September-October peak season approaches, downstream weekly operating rates have shown signs of recovery this week. However, under the influence of the off-season, it is difficult for consumption from terminals to processed materials to exceed expectations. The growth rates of industries such as home appliances and PV, which had strong support in the early stage, have slowed down. Some aluminium terminal export orders have also declined, and the construction industry is still experiencing a super-seasonal decline. Amid the off-season atmosphere, aluminium prices are fluctuating at highs, while consumption recovery remains relatively weak. Against the backdrop of still sufficient supply, the trend of continued inventory buildup in the short term remains unchanged. Overall, domestic and overseas macro tailwinds coupled with potential supply risks in aluminium kept prices holding up well. However, during the off-season, inventory buildup pressure remained significant. After the positive sentiment is digested, the price center of aluminium may face the risk of jumping initially and then pulling back, with the RMB 21,000 per tonne level still under pressure.
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 information.
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