The dollar extends lower to 99.54, passing yesterday's test. China's July auto sales fall 20.9% while NEV exports surge.美元继续走弱至 99.54,昨日检验通过;中国 7 月汽车零售下降 20.9%,新能源车出口大增。

1 · Market Performance

Stated first: the writing point and what is unobserved

• This brief was written at 09:45 Beijing on Monday August 17. The SHFE day session is forty-five minutes old and its print is NOT in this brief.
• ⚑ As of 09:45, SMM had NOT published its Aluminum Morning Meeting Summary, and no new SMM A00 quotation exists (SMM quotes around 11:00 Beijing).
• ⚑ Two scheduled events land today and both are unobserved at writing: China’s July activity data at 10:00 Beijing, and SMM’s Monday social-inventory print.

SHFE: the Friday night session closed FLAT at 23,945 (carried, now settled)

• The night session finished flat at 23,945 yuan/mt, exactly the August 14 settlement of both AL2609 and AL2610, and +60 (+0.25%) against the August 14 day close of 23,885.
• Night highs and lows: AL2609 high 24,000, low 23,835; AL2610 high 24,005, low 23,850; AL2608 high 23,920, low 23,820. The finish gave back 55–60 from the session’s own highs.
• Whole-product night open interest 652,352, +12,655 — the largest night build of this sequence; night volume 151,099.

Moving averages: the night close is still 31 BELOW MA10 (carried)

• The averages are this brief’s own caliber, computed from SHFE’s own daily files, main-contract closes, ninety trading sessions (April 7 to August 14): MA5 24,135.00, MA10 23,976.00, MA20 23,640.75, MA30 23,456.33, MA40 23,347.50, MA60 23,650.00.
• Against those, the night close of 23,945 sits 190.00 BELOW MA5 and 31.00 BELOW MA10, while holding +304.25 over MA20, +488.67 over MA30, +597.50 over MA40 and +295.00 over MA60.
• The August 14 day close of 23,885 was the first close beneath MA10 since July 27. The night session narrowed the gap to −31 but did NOT reclaim it, and it remains unrepaired as of this edition.
• Twenty-session close range 23,010–24,285; sixty-session range 22,370–24,825. SMM’s band is unchanged at 23,600–24,450.

August 14 day session by contract (carried, unchanged)

• AL2609: open 24,145, high 24,170, low 23,810, close 23,885, settlement 23,945; −275 on settlement (−1.14%) and −205 on close (−0.85%); volume 154,553, open interest 214,610 (−16,098).
• AL2610: open 24,100, high 24,170, low 23,795, close 23,885, settlement 23,945; open interest 228,180 (+7,109), leading AL2609 by 13,570 lots — the roll is complete.
• AL2608: close 23,900, settlement 23,940, open interest 15,050.
• Whole-product open interest 639,697 (+2,577), volume 328,544.
• Weekly: −155 (−0.64%) against August 7’s 24,040; week high 24,470 (August 12, the cycle high), week low 23,810 (August 14) — an outside reversal week.

⚑ New: the AD2610 night close is settled, and it is twice the figure carried

• ⚑ SMM’s cast aluminium alloy morning comment, published 08:30 Beijing on August 17: AD2610 opened 23,170 yuan/mt on Friday night, came under early pressure, then as bearish momentum weakened it consolidated and rebounded to close 23,245, +0.48%.
• ⚑ This supersedes the +0.24% snapshot carried from the weekend wrap.
• ⚑ The Friday night ranking inside the aluminium complex is therefore settled: cast aluminium alloy +0.48% > SHFE aluminium FLAT (23,945) > alumina main contract −0.19%.

LME: no new print (Westmetall has added no row after August 14)

• Official caliber, carried: August 14 cash settlement $3,248.00 (−$31.00), three-month $3,246.00 (−$29.00); cash-to-3M backwardation +$2.00.
• Cumulatively −$125.00 (−3.71%) from the August 11 high of $3,373.00; −$31.50 (−0.96%) on the week.
• This brief’s own LME averages (Westmetall cash settlements, sixty-one sessions): MA5 $3,307.00, MA10 $3,283.55, MA20 $3,236.72, MA40 $3,195.09, MA60 $3,337.01.
• ⊘ SMM’s own aluminium price page carries an LME quote of 3,255 (+10, +0.31%) against Westmetall’s August 14 three-month of 3,246. The calibers are printed side by side and not reconciled.
• ⊘ TradingEconomics caliber, carried: $3,247.70 (+0.19%); month +3.18%, year +24.74%; Q3 forecast $3,276.08 and twelve-month $3,475.69.

Interpretation

• ⚑ Price position: the night close of 23,945 sits at the top of the pullback zone, not in a high zone. The cycle high of 24,470 and Friday’s low of 23,810 frame a 660 range, and 23,945 sits 135 off the low, just above the 20th percentile of that range.
• ⚑ The mechanical reading is unchanged: the session held its low (23,835 above 23,810) and failed MA10 (23,945 below 23,976). Holding the floor without reclaiming the average is a consolidation shape, not a reversal shape (this is interpretation).
• ⚑ New reading: AD2610’s night shape — dip, then recovery to close +0.48% — is the opposite of aluminium’s, which opened higher and gave back 55–60 to finish flat. The intraday repair was stronger at the alloy end, and the alloy end sits closer to the downstream (this is interpretation).
• ⚑ The internal contradiction in the LME column persists: the flat price fell $125 over three sessions while the curve stayed backwardated. A genuine surplus would not tighten the front (this is interpretation).

2 · Aluminum Prices and Related Markets

Spot: no new quotation exists at writing; the August 14 caliber is carried

• SMM A00 (August 14): 23,870 yuan/mt, range 23,860–23,880, −250 (−1.04%) against August 13’s 24,120 — a second consecutive 250 decline; August 12 was 24,370.
• ⚑ That level was re-cited in SMM’s own 08:30 cast-alloy comment today, confirming it as the latest spot caliber at writing.
• Basis: −30 against AL2608’s close of 23,900 and −15 against AL2609’s 23,885; implied −75 against the night close of 23,945. On August 12 it was a +115 premium.
• But SMM’s own August 14 South China review still places transactions at a PREMIUM of 60–100 against the 2608 contract, with mainstream quotations −10 to 0.
• Nine-region August 14 caliber, carried: Shanghai 23,870 (−250), Wuxi 23,860 (−260), Hangzhou 23,900 (−260), Central China 23,770 (−250), Foshan 23,920 (−280), Chongqing 23,830 (−250), Tianjin 23,920 (−200), Linyi 23,920 (−220), Shenyang 23,865 (−145).

Alumina: carried

• SMM alumina index 2,689.77 yuan/mt (−0.58), with Shandong, Henan, Shanxi and Guizhou each −5.
• Australian FOB $349/mt (+$1); a cargo traded at $374 CFR Malaysia.
• AO2610 closed +16 against the trend on August 14, on the same day AL2609 fell 205; the most-traded alumina contract was −0.19% in the Friday night session.
• August national weighted-average full cost 2,700–2,820 yuan/mt and cash cost 2,530–2,650 yuan/mt (SMM).
• Against a full-cost midpoint near 2,760, the index at 2,689.77 leaves the industry below full cost and above cash cost — the mechanical boundary of this alumina downleg (this is a derivation).

⚑ Secondary aluminium and alloy: the column with the most new data today

• ADC12, carried: 24,200 yuan/mt, down from 24,400; the import loss exceeds 1,000 yuan/mt.
• ⚑ AD2610 night session: open 23,170, close 23,245, +0.48% (SMM, August 17, 08:30).
• ⚑ Theoretical ADC12-over-AD2610 premium: 865 yuan/mt on the August 14 caliber (SMM).
• ⚑ Total registered cast aluminium alloy warrants: 18,311 mt on August 14, +333 on the previous trading day.
• ⚑ A00-to-Foshan-mixed-aluminium-extrusion-scrap spread: approximately 2,250 yuan/mt.
• ⚑ SMM’s outlook: ADC12 to move sideways within a range — elevated raw-material cost supports the floor, while weak end-use demand in the high-temperature off-season caps the ceiling.
• ⊘ Arithmetic note, flagged and NOT reconciled: an 865 premium against a carried ADC12 of 24,200 implies an AD2610 reference near 23,335, which does not align with the −510 (−2.16%) two-session move carried from August 14. SMM describes the premium as theoretical, and it may embed delivery or tax adjustments.

⚑ Cross-metal: copper is near a record and aluminium is not

• ⚑ SMM’s copper morning comment, August 17: LME copper opened $14,108.50, high $14,196.00, close $14,172.50, +0.26%; volume 13,000 lots, open interest 269,000 lots. SHFE copper 2609 opened 107,920 yuan, high 108,320, close 108,200, +0.49%, volume 26,000 lots.
• ⚑ LME copper has now posted a seventh consecutive weekly gain.
• ⚑ A separate August 17 04:55 market note: LME copper stocks have fallen for a 42nd consecutive day to 204,975 mt, with nearly half the remainder earmarked for withdrawal; the August–September spread is near $370 and the cash-to-3M backwardation near $434.
• ⊘ That note also puts copper at ‘approximately $14,500’, which conflicts with SMM’s $14,172.50 close; it is carried as an analyst-note level only.
• ⚑ The comparison: aluminium’s LME stocks have also fallen, for a 34th consecutive day, to 248,300 mt, and its curve is also backwardated — by $2.00.

Interpretation

• ⚑ The single item worth separating out this morning is the curve comparison rather than the price comparison. Copper and aluminium share the same two structural features — a long consecutive stock draw and a backwardated front — and copper’s backwardation is $434 while aluminium’s is $2.00. This is not an argument that aluminium should trade like copper; copper has a concentrate crisis with negative treatment charges for a nineteenth month that aluminium does not have. It is a reading of whether the market BELIEVES the tightness (this is interpretation).
• ⚑ The consequence: until aluminium’s own backwardation widens beyond a rounding error, the LME stock series is better treated as a floor argument than as a rally argument. This brief has been ranking it slightly too high in the bull column (this is interpretation, and a correction to this brief’s own prior weighting).
• ⚑ The static contradiction in the spot column persists: SMM’s own South China transactions are still at a 60–100 premium while the close-derived basis is −30. Both being true means the discount comes mainly from contract selection and the roll rather than from a genuine physical surplus (this is interpretation).

3 · Inventory

⚑ The Monday print is pending — the most important unobserved item in this edition

• SMM social inventory, carried from the August 13 Thursday print: 898,000 mt, −35,000 week-on-week against August 6’s 933,000 and −19,000 against Monday August 10’s 917,000.
• The first print below 900,000 mt and the steepest Thursday draw of the series. Thursday series: 953,000 → 933,000 → 898,000.
• From the year’s high near 1.47 million mt in early May, destocking now exceeds 570,000 mt (this is a derivation).
• ⚑ Today’s (August 17) Monday print had not been published at writing. It is the only domestic datum that can change the structure of the bull case in this edition.
• LME stocks, carried, with no new Westmetall row: 248,300 mt, −1,700, a 34th consecutive daily decline; −8,100 on the week.
• Cast aluminium alloy ingot inventory, carried: 25,500 mt, +1,500 week-on-week — ending ten consecutive weeks of destocking that removed 38,900 mt.
• ⚑ Registered cast alloy warrants at 18,311 mt (+333) point the same way as the alloy-ingot build (this is interpretation).
• Billet inventory, August 10 caliber: +4,000 week-on-week, though both social and in-factory billet stocks remain low versus the same period in recent years (SMM, August 15).

Interpretation

• ⚑ Inventory remains the bulls’ strongest column and was not weakened at any point over the weekend — but it has now gone three editions without new evidence.
• ⚑ The test, carried and stated plainly: if destocking continues from a base of 898,000 mt, the draw has moved into a supply-driven phase; if it turns to a build, the August 13 print gets re-read as a one-off caused by high prices deferring arrivals, and the bulls would have no unweakened column left (this is interpretation).
• ⚑ The two cracks inside the inventory column are unrepaired: cast alloy ingots ended ten weeks of destocking with a build, and billet inventory turned to a 4,000 mt build. Today’s +333 mt warrant build is a third small signal pointing the same way (this is interpretation).

4 · Macro Factors

⚑ The dollar: yesterday’s falsification test has PASSED — the index is extending

• ⚑ TradingEconomics caliber, Monday Asia session: the dollar index is at 99.54, −0.127 (−0.13%) against Friday’s 99.667.
• ⚑ Month −1.40%, year +1.40%; Q3 forecast 99.44 and the twelve-month forecast cut to 97.92.
• ⚑ Yesterday’s brief wrote the test explicitly: ‘whether the dollar index extends Friday’s decline — if it does not, the dollar break item should be treated as falsified.’ A second consecutive lower print has now occurred, so the item passed rather than died.
• ⚑ The qualification must be kept alongside it: two sessions are not a trend, and the week that just closed was +0.04%. The item is therefore upgraded from neutral to neutral-with-a-bullish-tilt, not to bullish (this is interpretation).
• TE’s attribution is the same mechanism this brief has been carrying: July retail sales printing unexpectedly negative, and July producer prices printing unchanged rather than higher, together lowering the hike path.

⊘ The Fed: three calibers coexist and are not reconciled here

• ⊘ September hike probability: approximately 30.6% (August 14 CME FedWatch caliber, carried) / approximately 35% (TE’s narrative caliber today) / approximately 40% (a media caliber). All three are listed; none is reconciled in this edition.
• Path on the FedWatch caliber: approximately 82% on July 23 → about 50% a month ago → 51% last Tuesday → about 35% last Thursday → about 30.6% last Friday.
• ⚑ New, from SMM’s copper morning comment on August 17: the market has LOWERED its expectations for multiple Fed hikes before mid-2027.
• The probability of at least one hike by year-end remains approximately 63%; effective fed funds 3.63%; the next FOMC is September 15–16 (a separate caliber lists the meeting date as September 16).

⚑ China: July activity data prints at 10:00 today (unobserved at writing)

• ⚑ Consensus caliber — Caixin’s survey of eleven domestic and international institutions, published August 6: July industrial output +4.8% y/y (June 5.3%); retail sales +1.8%; January–July fixed-asset investment −5.9%; exports +23.1%; imports +26.4%.
• ⚑ These are FORECASTS, not prints. The actual release lands fifteen minutes after this brief was written.
• ⚑ Discriminating note: with July’s credit contraction already confirmed, the fixed-asset-investment and property lines carry more value for aluminium than the industrial-output line — industrial output is where the export strength lands, and investment is where the domestic weakness lands (this is interpretation).
• July financial data, carried and confirmed: M2 +7.7% y/y against 7.9% expected and 8.0% in June; outstanding yuan loans +5.1% against 5.2% in June and a 5.3% consensus, a record low; TSF stock +7.4%, unchanged; household loans −460.3 billion yuan; corporate loans −130 billion; January–July new loans 10.38 trillion against 12.87 trillion a year earlier — the second monthly contraction of 2026.

US data (carried)

• July retail sales −0.6% m/m to $763.6 billion against +0.1% expected — the first decline in nine months; the ex-autos-and-gas control group −0.2%.
• University of Michigan August preliminary sentiment 51.0 from 55.2 against 54.5 expected — the first decline in three months.
• July producer prices printed unchanged rather than the expected increase.

Energy and geopolitics: the window has expired, the arrangements are unobserved

• Brent, August 17 caliber: $88.54/bbl, +0.02%; month −0.77%, year +32.94%; Q3 forecast $90.41.
• TE’s description: Brent traded near $89 on Monday, holding last week’s gains, with Middle East tension elevated — Israel–Lebanon operations, US sanctions pressure on Iran, and the Strait of Hormuz access dispute all named.
• ⚑ But TE also notes that crude continues to move through the strait in millions of barrels, which limits further gains — that is, the geopolitical premium has not yet converted into an actual supply interruption (this is a quoted caliber).
• ⚑ The fee-free sixty-day transit window under the June 17 Islamabad Memorandum expired around August 16 — YESTERDAY — and the practical arrangements after expiry are unobserved at writing.
• Hegseth has called the naval blockade of Iranian ports indefinite; CENTCOM has redirected 59 commercial vessels since July 13; Bessent has flagged unprecedented economic isolation measures.

Interpretation: the net direction of the macro column

• ⚑ Bullish for aluminium: the dollar posted a second consecutive lower print and passed its falsification test; hike expectations continue to fall across calibers and now extend to multiple hikes before mid-2027; the expiry of the Hormuz fee-free window preserves upside risk in the energy cost channel.
• ⚑ Bearish for aluminium: China’s credit is contracting with a deteriorating composition; roughly 63% odds of at least one hike by year-end mean easing is not priced; oil held last week’s gains but was essentially unchanged on Monday, and crude is still transiting the strait normally.
• ⚑ Net reading: the macro column recovers from yesterday’s neutral to neutral-with-a-bullish-tilt, on the single variable of the dollar’s continuation (this is interpretation).

5 · Fundamentals

⚑ Downstream demand: July’s auto data is the worst downstream print of this cycle

• ⚑ CPCA data via SMM, published August 16: July nationwide passenger-vehicle retail 1.461 million units, −20.9% year on year.
• ⚑ Internal-combustion retail 510,000 units, −41% year on year.
• ⚑ NEV retail 951,000 units, −3.9% year on year; NEV penetration rose to 65.1% of passenger-vehicle sales.
• ⚑ NEV exports 540,000 units, +147.8% year on year.
• ⚑ Structural reading: the domestic leg contracted by a fifth while the export leg nearly two-and-a-halfed. The vehicles are still being built, so the aluminium content has not disappeared — but the demand has relocated from domestic to export, which exposes it to tariffs, to the narrowing China-overseas price spread, and to trade-policy risk (this is interpretation).
• SMM July aluminium processing PMI 42.2%, −4.4 pp m/m, with all seven sub-sectors contracting: foil 39.0, construction extrusion 39.7, secondary alloy 37.6, sheet and strip 44.8, industrial extrusion 42.1, wire and cable 44.4, primary aluminium alloy 43.9 (carried).
• ⚑ Summary: the domestic demand column is now simultaneously weak in credit, in processing, in property and in autos, with billet named by its own analyst as having peaked in July (this is interpretation).

Billet: July was the year’s high, with a retreat forecast for August (carried)

• SMM, August 15: July billet operating rate 58.3%, +1.1 pp m/m and +5.2 pp y/y — a year-to-date high and a three-year high for the period; August forecast approximately 56.9%.
• Processing fees pulled back sharply from June highs and now sit below the industry average production cost, with further weakening signs in August.
• Constraints: the traditional off-season in the second half; falling extrusion operating rates; a narrowing China-overseas spread weakening export momentum; and extruders switching to remelted aluminium ingot substitutes, which SMM calls a natural ceiling for billet processing fees.
• Supports: tight liquid-aluminium supply; continuing passive cuts in southwest China; both social and in-factory inventories low versus recent years.

Domestic supply (carried)

• July output +1.6% y/y and +3.5% m/m on a 31-day caliber; month-end existing capacity approximately 46.29 million mt, flat m/m (SMM).
• July liquid-aluminium ratio 78.3%, +1.1 pp m/m; August forecast 78.5%.
• July casting-ingot output −15.1% y/y and −1.4% m/m — one of the supply-side explanations for the social-inventory draw.
• Passive cuts in southwest China continue.

Overseas supply (carried)

• Alunorte: the 6.3 mt/yr refinery has run at 50% since August 11 on the CELBA (New Fortress Energy) gas disruption; it has procured a spot LNG cargo from a European energy firm and requested direct access to the Barcarena receiving and regasification terminal; the cut has not been reversed; Hydro’s Q3 impact estimate is unchanged at USD 75–100 million; the arbitration is unresolved.
• EGA Al Taweelah: running at 18% of capacity, with full capacity expected in Q1 2027; repair capex 1.5 billion dirhams; the recycling plant at 10%.
• Tomago: A$2.5 billion of support over ten years from 2029, with A$1.1 billion of its own investment and load curtailment at power peaks.
• Pending restarts: Slovalco (Q4) and the Missouri smelter (year-end).
• Indonesia’s magnitude-7.7 earthquake: assessed by SMM as near-zero for the aluminium chain, with the nearest smelter approximately 624 km from the epicentre and outside the 300 km damage radius.

Alumina and cost (carried)

• SMM alumina index 2,689.77 (−0.58); Australian FOB $349 (+$1); a cargo at $374 CFR Malaysia.
• August national weighted-average full cost 2,700–2,820 yuan/mt and cash cost 2,530–2,650 yuan/mt.
• July’s cost rebound was driven mainly by bauxite: imported CIF rose and domestic ore stayed tight; August has no clear timetable for domestic mine restarts, and imported shipments are expected to shrink further in the rainy season.
• Guinea’s H1 bauxite exports hit a record 114.8 million mt, +15% y/y; refinery bauxite inventories sit near 96 days.

Interpretation

• ⚑ The net change in the fundamentals column this edition is negative, and every changed point sits on the demand side: auto retail at −20.9% is the worst single downstream print of this cycle, while the supply side produced no new disruption at all over the weekend.
• ⚑ The one uncontested supply-side bullish item remains July casting-ingot output at −15.1% y/y: it explains both the social-inventory draw and the tightness in spot, and it depends on no overseas event (this is interpretation).
• ⚑ Exports now appear in the column twice, pointing opposite ways: NEV exports +147.8% (bullish for total aluminium content) and weakening billet export momentum (bearish for processing fees). Both being true means the export strength is concentrated in finished goods rather than in aluminium products themselves (this is interpretation).

6 · Primary Aluminum Spot Market

No new transactions or quotations at writing; SMM’s August 14 South China review (12:06) is carried

• Mainstream quotations: −10 to 0 against the SHFE 2608 contract, improved from −30 to −10 on August 12.
• Transaction levels: a premium of 60–100 against the SHFE 2608 contract.
• Holder behaviour: attempts to hold offers firm in the morning; as bearish sentiment built into the weekend, willingness to cash out early rose and most holders shaded offers to move cargo.
• Downstream behaviour: standing aside initially in wait of lower prices, then modest restocking at the lows; traders focused on absorbing discounted cargo.
• Overall trading: moderate.
• Supply description: inventory has returned to a destocking channel, but circulating supply is relatively ample, some holders still hold premiums, and the pace of shipment has slowed.

Regional structure (August 14 caliber, carried)

• East China: Shanghai 23,870 (−250), Wuxi 23,860 (−260), Hangzhou 23,900 (−260).
• Central China: 23,770 (−250) — still the lowest of the nine regions.
• South China: Foshan 23,920 (−280).
• Others: Chongqing 23,830 (−250), Tianjin 23,920 (−200), Linyi 23,920 (−220), Shenyang 23,865 (−145).
• South China fell the most in this pullback (Foshan −280) and the north the least (Shenyang −145) (this is a derivation).

⚑ Scrap and alloy end (new today)

• ⚑ The A00-to-Foshan-mixed-aluminium-extrusion-scrap spread is approximately 2,250 yuan/mt (SMM, August 17).
• ⚑ That spread is the direct gauge of how strongly secondary metal substitutes for primary: a wider spread raises the economics of substitution, corroborating the reported switch by some extruders to remelted aluminium ingot (this is interpretation).

Interpretation: sentiment indicators (qualitative, carried from the August 14 caliber)

• Shipment willingness: FIRM-TO-STRONG (holders actively shaded offers to move cargo).
• Purchasing willingness: NEUTRAL-TO-WEAK (stand aside first, restock modestly second; no concentrated buying).
• Trader participation: NEUTRAL-TO-FIRM (focused on absorbing discounted cargo).
• ⚑ Composite reading: the spot column followed the futures down without panic — quotations improved, transactions stayed at a premium, and volume was only moderate. Today’s A00 quotation around 11:00 Beijing will be the first usable new spot evidence (this is interpretation).

7 · Key Price Drivers

Bullish factors

• ⚑ The dollar index posted a second consecutive lower print at 99.54 (−0.13%), passing the falsification test set yesterday; the twelve-month forecast was cut to 97.92.
• ⚑ Hike expectations keep falling: September odds sit in a 30.6%–40% range across calibers, and the market has lowered expectations for multiple hikes before mid-2027.
• ⚑ AD2610 closed the night session at 23,245, +0.48% — double the +0.24% carried over the weekend — with a dip-then-recover shape.
• ⚑ Cast aluminium alloy outperformed both SHFE aluminium (flat) and alumina (−0.19%) overnight: the cost end gave ground while the downstream-adjacent end held.
• ⚑ NEV exports +147.8% y/y to 540,000 units — the aluminium content in those vehicles has not disappeared.
• ⚑ Social inventory at 898,000 mt, −35,000 w/w, the first print under 900,000 mt and the steepest Thursday draw of the series.
• ⚑ LME stocks 248,300 mt, a 34th consecutive daily decline, −8,100 on the week.
• ⚑ LME cash-to-3M holds a +$2.00 backwardation, and that tightening occurred while the flat price was falling.
• ⚑ The Friday night session closed flat at 23,945 and held 23,835, above Friday’s day low of 23,810.
• ⚑ SMM’s South China transactions remain at a 60–100 premium to the 2608 contract, with mainstream quotes improved from −30/−10 to −10/0.
• July casting-ingot output −15.1% y/y, directly reducing warehouse-eligible units.
• July liquid-aluminium ratio 78.3% with an August forecast of 78.5%, continuing to squeeze ingot casting.
• Billet social and in-factory inventories both low versus recent years, preserving holder pricing power.
• Brent held last week’s gains and is +32.94% year on year; the Hormuz fee-free window has expired and the blockade is called indefinite.
• Alunorte’s 6.3 mt/yr refinery is still at 50%; the cut has not been reversed.
• Passive cuts in southwest China continue; existing capacity at 46.29 million mt is flat m/m, close to the ceiling.
• August imported-bauxite shipments are expected to shrink further in the rainy season, keeping raw-material cost firm.
• ⚑ LME copper’s seventh consecutive weekly gain, near record levels, indicates the base-metals funding environment has not deteriorated.

Bearish factors

• ⚑ China’s July passenger-vehicle retail −20.9% y/y to 1.461 million units — the worst downstream print of this cycle.
• ⚑ Internal-combustion retail −41% and NEV retail −3.9%: the entire domestic leg contracted.
• ⚑ Demand composition has shifted toward exports, exposing it to tariffs and to the narrowing China-overseas spread (this is interpretation).
• ⚑ Copper’s $434 backwardation against aluminium’s $2.00: identical structure, different pricing — the market is not yet paying for aluminium’s tightness (this is interpretation).
• ⚑ China’s July outstanding yuan loans +5.1% y/y, a record low; M2 +7.7% below consensus; household loans −460.3 billion and corporate loans −130 billion.
• ⚑ The billet operating rate peaked at 58.3% in July with August forecast at 56.9%; processing fees are already below the industry average production cost.
• ⚑ Extruders are substituting remelted ingot, and the A00-to-Foshan-scrap spread near 2,250 keeps that substitution economic.
• ⚑ The August 14 close lost MA10 — the first break since July 27 — and the night close is still 31 below it, unrepaired.
• ⚑ The week was an outside reversal: high 24,470, low 23,810, week −155.
• ⚑ Whole-product open interest built by 1,345 and 2,577 on two falling sessions and by a further 12,655 overnight — the shape of fresh shorts rather than long liquidation (this is interpretation).
• ⚑ Registered cast alloy warrants at 18,311 mt (+333), pointing the same way as the alloy-ingot inventory build.
• ⚑ Cast aluminium alloy ingot inventory turned to a 1,500 mt weekly build at 25,500 mt, ending ten weeks of destocking; billet inventory turned to a 4,000 mt build.
• ⚑ ADC12 fell from 24,400 to 24,200, and SMM’s outlook is explicitly range-bound with off-season end-use demand capping the upside.
• July aluminium processing PMI 42.2%, with all seven sub-sectors contracting.
• ⚑ The dollar’s decline is only two sessions old and the week that just closed was +0.04% — not yet a trend.
• ⚑ Roughly 63% odds of at least one hike by year-end means easing is not priced.
• ⚑ Crude is still transiting the Strait of Hormuz normally, so the geopolitical premium has not converted into an actual interruption (TE).
• ⚑ SMM has lowered both bands (SHFE 23,600–24,450 and LME $3,180–3,330), and TE cut its LME forecasts to $3,276.08 (Q3) and $3,475.69 (twelve-month).
• EGA Al Taweelah is restarting faster than expected (18% now, full capacity Q1 2027); Tomago has been rescued, reducing expected overseas curtailment.
• ⊘ China’s January–July fixed-asset investment is forecast at −5.9% (confirmed at 10:00 today), and property investment and new starts remain deeply negative.

8 · One-Sentence Market View

9 · Watchlist for Today’s Day and Night Sessions

• ⚑ Whether AL2610 reclaims and holds 23,976 (MA10) and 24,000–24,005 (the night highs). If it fails, 23,945 — the night close and the August 14 settlement — converts into resistance. The downside sequence: 23,945 → 23,885 → 23,850/23,835 → 23,810 → 23,650 (MA60) → 23,600.
• ⚑ China’s July activity data at 10:00 today. Consensus caliber: industrial output +4.8%, retail sales +1.8%, January–July FAI −5.9%. The discriminating lines are fixed-asset investment and property, not industrial output (this is interpretation).
• ⚑ Today’s SMM Monday social-inventory print: whether destocking continues from a base of 898,000 mt. This is the direct test of whether the bulls’ one unweakened column persists; a build would re-date the August 13 print as a one-off (this is interpretation).
• ⚑ Whether the LME cash-to-3M backwardation (+$2.00) widens. Against copper’s roughly $434, this is the single most direct gauge of whether the market has begun to pay for aluminium’s tightness (this is interpretation). Also whether LME reclaims $3,261 (August 6) and $3,275–3,279 (August 13).
• ⚑ Whether the dollar index posts a third consecutive lower print. Two sessions are not a trend; if today retraces, the item should be demoted back to neutral (this is interpretation).
• ⚑ The spot column: SMM’s A00 quotation around 11:00 today — whether the implied −75 basis against the night close of 23,945 repairs, and whether the South China 60–100 transaction premium holds.
• ⚑ Whether the intra-complex ranking persists: cast aluminium alloy > SHFE aluminium > alumina. If it does, it is continuing evidence of the cost end giving ground while the downstream end holds (this is interpretation).
• ⚑ The practical arrangements now that the Hormuz fee-free window has expired, and whether Bessent’s flagged Iran isolation measures land this week; oil prices and marine insurance premiums are the transmission path.
• ⚑ The direction of whole-product open interest: a rally on rising open interest is shorts being pressed; a rally on falling open interest is short covering (this is interpretation).

Disclaimer: This brief is an industry information compilation and research reference. All figures are labeled with their source caliber, and confirmed data is separated from market interpretation throughout. It does not constitute investment advice, an offer, or a solicitation, and no responsibility is accepted for any trading decision. Futures and physical markets carry risk; readers should verify the data independently and form their own judgement. Items marked ⊘ denote conflicting calibers or data not retrievable at the time of writing.