Comprehensive Analysis of Aluminium Prices in July

Monthly summary: The aluminium price dropped from 20950 yuan per ton at the beginning of July to 20860 yuan per ton at the end of July, a decrease of 90 yuan per ton compared to the beginning of the month.

Market data of July

Nanhai Nonferrous Metals – Foshan A00 Market Trend

(Data source: worldal.com)

AHD Market Trend

(Data source: worldal.com)

The market situation of aluminium

(Data source: worldal.com)

The market of alumina

(Data source: worldal.com)

Price trend–The price trend of alumina in July presented a complete cycle of “rising driven by policy expectations- sharp increase triggered by capital games- rational return and volatile conclusion.” The short-term structural tightness of spot prices supports prices, but in the medium and long term, the pressure of overcapacity (with domestic new capacity exceeding 2 million tons by 2025) and the impact of low-priced overseas goods (the commissioning of the third phase of Bintan in Indonesia) will lead the market back to the logic of overcapacity. Investors should pay close attention to the progress of new capacity deployment in August, the recovery of Guinea ore shipments and the pace of aluminium plant inventory replenishment. In terms of operation, they should mainly adopt “rebound short selling” to size the current arbitrage window opportunity.

Supply side

Both production capacity and output increased— In July, the domestic operating capacity of alumina reached 88.27 million tons, up 1.2% month-on-month. The output is expected to be 7.5 million tons (up 3.3% month-on-month), setting a new high for the year. The new contributions mainly come from the release of compliant production capacity in Shanxi and Henan. Among them, a 600,000-ton project in Shanxi was put into operation ahead of schedule, and a 1 million-ton production line in Henan completed capacity replacement. Although Guangxi has planned a new production capacity of 1 million tons, the actual increase is limited due to the progress of equipment commissioning.

The increase in imported ore was significant— From January to June, 103 million tons of bauxite were imported (year-on-year) Guinea accounted for over 70% (with an import volume of 13.22 million tons in June). The rainy season in Guinea (July to September) may affect the volume of arrivals after August, but the current port inventory is high and the mineral price is volatile and weak (import index is 73.37 US dollars per ton, down 0.95 US dollars week-on week).

Domestic mineral supply differentiation— Due to the impact of environmental protection and safety regulations, bauxite mining in Shanxi and Henan is restricted, and prices remain firm. Output in Guangxi and Guizhou declined year-on-year. From January to June, domestic mine output was 30.39 million tons (+9.54% year on year), and there was no short-term excess pressure.

Domestic market

The information office of The State Council held a press conference to introduce the development trend of industry and information technology in the first half of 2025. Xie Shaofeng, the chief engineer of the Ministry of Industry and Information Technology, disclosed at the meeting that the Ministry will implement a new round of stable growth work plans for ten key industries including steel, non-ferrous metals, petrochemicals and building materials, to encourage these industries to focus on adjusting the structure, optimizing supply and eliminating backward production capacity. Relevant specific plans will be released successively in the near future. This policy signal has sparked strong expectations in the market for structural adjustments in the supply capacity of alumina. The trading heat of the “anti-internal competition” theme has continued to rise, and the bullish sentiment has been reignited once again.

Inventory

As of July 21^st, the alumina inventory of the previous period was only 6922 tons, accounting for less than is far lower than normal. At present, the volume of warehouse receipts has approached the lowest value since the listing of alumina futures, causing a tight supply of spot resources available for delivery and intensifying market concerns over the risk of crowded positions, which in turn has provided some support for the price.

Aluminium market

Price

(Data source: worldal.com)

As of July 30^th, the price range for aluminium processing is as shown in the above chart. The price ranges and average prices of various types of aluminium products do not differ much, indicating that the price fluctuations are relatively stable. The price range of most products is between 200 and 300 yuan.

Macro market

As the world’s largest aluminium processor, China’s exports of aluminium cables and profiles to the United States may benefit from copper tariffs. In the short term, it may be supported by the release of alternative demand and cost transmission, but in the medium and long term, we need to be vigilant against the superimposed impact of oversupply pressure and policy uncertainty.

The EU trade agreement was reached. The US and the EU agreed on tariffs on steel and aluminium, maintaining a 50% tariff rate, but reducing the tariffs on other industrial products to 15%. This short-term easing of the risk of escalating trade conflicts has led to a temporary rebound in market risk appetite.

Inventory

In early July, the explicit inventory of aluminium ingots in several major warehouses in the South China Sea region rose from about 130000 tons to over 160000 tons. On July 25^th, SMM’s statistic on domestic electrolytic aluminium social inventory showed that Shanghai, Wuxi and Nanhai District of Foshan all experienced varying degrees of inventory accumulation. The weekly outbound volume in Foshan showed a downward trend compared with the previous week, and the total outbound volume of aluminium ingots decreased, further indicating that the aluminium inventory in Nanhai District is on the rise.