Aluminum prices fluctuated horizontally in July

Aluminum prices fluctuated horizontally in July
Aluminum prices fluctuated horizontally in July. According to the Commodity Market Analysis System of Shengyi Society, as of July 31, 2025, the average price of aluminum ingots in the East China market in China was 20596.67 yuan/ton, a decrease of 0.91% from the market average price of 20786.67 yuan/ton on July 1.
The fundamental characteristics of aluminum ingots in July are as follows:
Aluminum ingot production capacity first decreased and then increased in July
From the perspective of operating capacity, the domestic electrolytic aluminum operating capacity at the end of June was about 43.83 million tons. Due to a slight decrease in capacity replacement, the industry’s operating rate declined month on month. The monthly output was 3.609 million tons, a decrease of about 3.2% month on month and a year-on-year increase of 1.6%. In July, the Yunnan replacement project was put into operation, and the overall operating capacity remained at a high level. Due to adjustments in production capacity replacement projects in some regions, there was a brief contraction in early production. However, with the gradual implementation of new projects in July, the overall production capacity supply has resumed its growth trend. For example, the newly launched projects in Yunnan gradually released production capacity in July, increasing the supply of electrolytic aluminum in the market and creating potential downward pressure on prices. This dynamic change in production capacity, which first decreases and then increases, affects the market’s expectations for aluminum ingot supply.
The impact of excess pressure on upstream core raw material alumina
Aluminum oxide, as the core raw material for electrolytic aluminum production, was significantly affected by oversupply pressure in the aluminum ingot market in July. The recovery of industry profits has led to the release of alumina production capacity to historical highs, and domestic production continues to rebound. Due to the abundant supply of alumina, the production cost of electrolytic aluminum is relatively stable and even has room for decline, which also gives electrolytic aluminum enterprises the motivation to increase production to a certain extent. Moreover, the issue of tight delivery capacity in Xinjiang is expected to ease in August. This expectation began to suppress market speculation on alumina and related aluminum products in July, resulting in a lack of support for raw material speculation in the rise of aluminum ingot prices. Against the backdrop of an oversupply of alumina, the stability of the aluminum ingot market supply has been enhanced, further suppressing the upward potential of prices.
Downstream demand is relatively weak
In July, it was the traditional off-season for consumption, and the operating rate of downstream processing enterprises generally declined. From the perspective of the aluminum processing industry, the weekly aluminum production rate has shown a downward trend, especially in categories such as aluminum plates and strips. During the off-season, market demand is sluggish, downstream enterprises’ orders decrease, and the purchase volume of aluminum ingots also decreases accordingly. In order to control costs and reduce inventory backlog, enterprises often adopt a strategy of on-demand procurement, resulting in average spot transactions of aluminum ingots and low market activity. When downstream enterprises face high aluminum prices, their willingness to accept orders is seriously insufficient, further weakening the market demand for aluminum ingots and forming a downward driving force on prices.

Differentiated demand in key downstream industries. In the field of new energy vehicles, from July 1st to 27th, the retail sales of new energy passenger cars in China increased by 15% year-on-year, but decreased by 17% compared to the same period last month, indicating weaker demand compared to the previous month. This indicates that the growth rate of demand for aluminum in the new energy vehicle industry slowed down in July, failing to form strong support for aluminum ingot prices. In the photovoltaic field, the overall output of photovoltaic modules in August showed limited month on month changes, and its driving effect on aluminum demand was also insufficient in July. Despite the overall development stage of the new energy industry, during a specific period in July, the demand for aluminum ingots was difficult to drive up prices due to seasonal factors, market adjustments, and other factors. Instead, weak demand growth intensified downward pressure on prices.