Aluminum prices may experience strong fluctuations in August

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.
Aluminum prices may experience strong fluctuations in August
Supply side: In August 2025, the supply of electrolytic aluminum will present a dual track pattern of “domestic stable growth+overseas supplementation”. Domestically, Yunnan trade in projects (such as Hongtai with a production capacity of 87790 tons) will gradually start production in late August, and with the completion of Inner Mongolia Huayun Phase III, the expected operating capacity will increase to 43.52 million tons (month on month+100000 tons), with a monthly output growth of 2.5% year-on-year to 3.726 million tons. Overseas supply should not be underestimated, with electrolytic aluminum production in countries such as Brazil and South Africa increasing by over 30% year-on-year. The scale of Russian aluminum entering the country through direct trade remains high (imports accounted for nearly 90% from January to June). In terms of alumina, domestic production increased by 3.5% year-on-year to 7.336 million tons, coupled with the easing of the tight delivery capacity problem in Xinjiang (after mid August), the cost side support has weakened. At the inventory level, as of July 31, the domestic social inventory of electrolytic aluminum increased to 544000 tons, and it is expected to continue the trend of accumulated inventory in August, with a high point of 550000 tons.
On the demand side: In early August, it was still the traditional off-season for consumption, and downstream processing enterprises maintained low operating rates (50% for aluminum profiles and 70% for cables). However, after mid August, the demand for “Golden September and Silver October” stocking gradually started, and aluminum rod inventory was slightly reduced, while aluminum plate and foil orders improved month on month. In the field of new energy, the production of photovoltaic modules remained unchanged in August compared to the previous month, and the year-on-year growth rate of retail sales of new energy vehicles slowed down to 15%. However, policy incentives (such as the implementation of “recognizing houses but not loans” in China) may indirectly drive the demand for construction aluminum. Overall, the demand side presents a game pattern of “weak reality in the off-season” and “strong expectations in the peak season”.
Macro influencing factors:
Starting from August 1st, the United States has imposed a 50% tariff on Brazilian aluminum products, which may lead to the flow of South American aluminum to the Chinese market and exacerbate domestic supply pressure.
Domestic policies provide support: special bond issuance accelerates, private economic support measures and other stable growth policies are intensified to boost market sentiment in the short term, but the “anti involution” policy regulates industry competition order.
The phased easing of tariffs between China and the United States (suspending 24% tariffs and retaining 10% tariffs) has eased concerns about trade frictions, but there is still uncertainty after the 90 day buffer period.
Future expectations

In the short term, aluminum prices in August will show a trend of weak first and then strong. The core driving factor has shifted from “inventory accumulation” to “peak season expectations and policy games”. Under the main trend of loose supply and weak demand, the upward space of aluminum prices is limited, and the expected operating range is 20300-21100 yuan/ton.