Aluminum prices stop falling and rebound in July

Aluminum prices stop falling and rebound in July
The trend of domestic aluminum ingot prices is expected to decline in July 2026. As of July 22, 2026, the average price of domestic aluminum ingots in the East China market was 23186.67 yuan/ton, an increase of 4.12% from the market average price of 22270 yuan/ton on July 1.
The main reasons for the rebound of aluminum prices in July are as follows:
1. Macro expectations are warming up:
The employment and inflation data in the United States have weakened, market expectations of interest rate hikes have cooled down, the US dollar has weakened, and industrial metals priced in US dollars have seen a recovery. The concentrated liquidation of short positions in the early stage has driven a rebound.
2. Significant inventory depletion:
The traditional off-season in China continues to significantly reduce inventory, causing LME aluminum inventories to fall to multi-year lows and tight supply of goods, consolidating the bottom of prices.
3. Supply rigid constraints:
The domestic electrolytic aluminum production capacity of 45 million tons has been capped, and the operating rate is close to full capacity; The slow resumption of production by aluminum plants in the Middle East, continuous reduction in high electricity prices in Europe and America, and limited global supply growth.
4. Demand resilience exceeds expectations:
Aluminum exports are on the rise, and the demand for lightweight and essential materials in ultra-high voltage, photovoltaic, and new energy vehicles is stable, offsetting the drag of traditional profiles during the off-season and replenishing downstream inventory at low prices.
5. Oversold repair market:
At the end of June, the short-term sharp drop in aluminum prices released a large amount of bearish sentiment, with prices severely oversold and funds buying at low levels driving a rebound.
The logic of aluminum price operation in July:
At the end of June, prices were dragged down by the diminishing Middle East geopolitical premium, strong expectations of Fed interest rate hikes, expectations of a summer consumption off-season, and concentrated bearish pressure; In mid to late July, the weakening of US economic data led to a cooling of interest rate expectations and a weakening of the US dollar. Coupled with the continuous decline in domestic and foreign aluminum inventories, the peak of domestic electrolytic aluminum production capacity, and strong supply rigidity due to the coexistence of overseas production resumption and reduction, the demand in emerging fields such as photovoltaics and new energy is bottoming out and downstream inventory is being replenished at a low level. In addition, short covering has pushed prices to stop falling and recover. However, the weak off-season of traditional real estate profiles, long-term overseas new production capacity, and high interest rate environment still limit the extent of price increases, resulting in an overall oversold recovery and volatile market.
Aluminum price forecast for the future:
Short term aluminum prices rely on low inventory, rigid supply, and loose macro expectations to fluctuate strongly, but the traditional off-season suppresses the increase; The peak season for downstream new energy and power grid demand in September and October is expected to drive prices slightly upwards, with upward potential constrained by overseas new production capacity and high interest rates; The long-term domestic production capacity cap supports the central uplift of the price bottom, and the release of overseas production capacity at the end of the year may bring a pullback, resulting in overall range fluctuations. We need to be alert to market fluctuations caused by geopolitical factors, Federal Reserve policies, and changes in real estate demand.