Core Viewpoint - The aluminum oxide futures market has shifted from a strong upward trend to a phase of oscillation and correction, with the main contract AO2509 declining from a recent high of 3238 yuan/ton on July 10 to a low of 3055 yuan/ton on July 17, indicating a downward price adjustment [2] Group 1: Market Dynamics - The initial price increase was driven by factors such as stable spot prices and macroeconomic policies, including expectations of domestic "anti-involution" policies and speculation about supply-side reforms in aluminum oxide [2] - The current supply-demand structure is evolving from a tight balance to a structural surplus, with operating capacity recovering to high levels and weekly production maintaining historical highs [3] - Despite some tightness in the spot market due to high execution rates of long-term contracts in certain regions, the overall supply of aluminum oxide remains loose [3] Group 2: Production and Profitability - The average daily production of aluminum oxide has exceeded 250,000 tons, with profits for aluminum oxide enterprises generally above 200 yuan/ton, and low-cost producers achieving profits over 600 yuan/ton [4] - The improvement in profitability has stimulated the resumption of previously idled production capacity [4] - The average complete cost of aluminum oxide is gradually decreasing as domestic ore prices stabilize and import ore prices show slight weakness [3][4] Group 3: Future Outlook - Key variables to watch in the aluminum oxide market include the pace of new capacity releases, the recovery of bauxite supply from Guinea, and potential production cuts or inventory reductions in response to macroeconomic uncertainties [4] - Short-term tightness in spot supply may support aluminum oxide prices, but if new capacity is released as planned in the second half of the year, prices may face downward pressure due to anticipated oversupply [5]