Latest statistics from the International Aluminium Institute show that global primary aluminum production totaled 5.98 million tons in June 2026, a year-on-year decline of 1.5%; the primary driver of this drop was geopolitical disruption in the Gulf production region. The Gulf region accounts for approximately 9% of global primary aluminum capacity; however, two local smelters have been affected by regional conflict since late March, disrupting raw material transport and finished product export channels. Consequently, local output in June was only 332,000 tons—down nearly one-third from 507,000 tons in the same period last year. Daily regional output stabilized at 11,000 tons, far below the pre-conflict norm of 17,800 tons. Although there have been intermittent moves to restart production, it is expected to take up to a year for the relevant facilities to return to full capacity, making it difficult to quickly bridge the short-term overseas supply gap. With global average daily primary aluminum production at 199,300 tons—up only 0.3% from May—the contraction in overseas supply continues to provide premium support for global spot prices.

Customs data for the first half of 2026 reveals synchronized shifts in domestic and foreign trade patterns for primary aluminum ingots. Cumulative imports of primary aluminum from January to June totaled 1.286 million tons, a slight year-on-year increase of 2.9%, though June imports alone stood at 167,000 tons—down 19.7% month-on-month and 13.1% year-on-year. During the same period, cumulative exports totaled 113,000 tons, up 31.8% year-on-year; June exports reached 38,000 tons, a sharp month-on-month rise of 73.1%. Net imports for June were 129,000 tons, a year-on-year decrease of 25.5%. As geopolitical tensions abroad drove up offshore premiums, the arbitrage window between domestic and international markets narrowed, significantly cooling the appetite for importing primary aluminum ingots, while overseas manufacturing demand for low-cost domestic ingots drove an increase in exports. In terms of the aggregate scope covering primary aluminum and various aluminum processed products, cumulative exports of unwrought aluminum and aluminum products reached 3.4 million tons in the first half of the year, up 16.3% year-on-year; June exports alone hit a yearly high of 710,000 tons, a 45.4% increase. Corresponding imports totaled 1.88 million tons, down 5.1% year-on-year, while cumulative alumina exports rose 19.8% to 1.61 million tons. Constrained overseas smelting capacity drove simultaneous increases in demand for bauxite, alumina, and aluminum products from China, highlighting the cost and supply advantages of China's complete industrial chain; the overseas supply gap continued to translate into increased Chinese exports. Cumulative bauxite imports reached 120.93 million tons in the first half of the year, up 17.4%, as stable domestic smelting operations drove steady growth in demand for upstream ore imports.

Regarding domestic spot market dynamics on July 20–21, the market exhibited narrow fluctuations at high levels with cautious downstream purchasing. On July 20, the average transaction price for mainstream A00 aluminum in the spot market was 23,180 RMB/ton, down slightly by RMB 30 for the day; the comprehensive benchmark price from SunSirs stood at 23,233 RMB/ton, marking a cumulative rise of 3.17% from the RMB 22,520 recorded in early July. While overseas geopolitical premiums continued to provide a price floor over the past two weeks, end-user consumption failed to keep pace. Downstream sectors—including construction profiles, automotive die-castings, and packaging foil—are currently in their traditional off-season; restricted outdoor construction and slowing manufacturing orders have led processing plants to maintain a "buy-as-needed" approach with small volumes. Consequently, market premiums/discounts have retreated, spot supply has become relatively ample, and upward price momentum remains suppressed by weak end-user demand. Prices for specific aluminum alloy ingots have edged down in tandem, though quotes for specialized aluminum products supporting the photovoltaic and new energy vehicle (lightweighting) sectors have remained resilient due to inelastic demand, causing price spreads between categories to widen. From the perspective of price transmission across the entire industry chain, sustained production cuts at Gulf aluminum smelters have provided long-term support for supply expectations, while high spot premiums in international markets have indirectly propped up domestic spot price floors via exports. However, domestic operating capacity for electrolytic aluminum has remained close to policy caps, ensuring stable overall supply; coupled with a slow, continuous decline in domestic social inventories during the first half of the year, this has tempered the potential for sharp price surges driven by bullish overseas factors. On the cost side, prices for alumina and pre-baked anodes have fluctuated within ranges, keeping domestic smelter processing margins stable and removing any cost-driven impetus for large-scale production cuts. A clear divergence has emerged between domestic and overseas demand: increased exports—driven by overseas manufacturing restocking of Chinese aluminum products—have offset weakening domestic demand in the real estate and automotive sectors during their traditional off-seasons, serving as a key stabilizing factor for the market in the first half of the year. Recent spot price volatility reflects the tug-of-war between bullish overseas supply factors and bearish domestic off-season trends. In the short term, barring new geopolitical developments, spot aluminum prices are expected to consolidate within a narrow, high-level range, with any significant market breakout awaiting the concentrated release of demand during the traditional domestic peak season.

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