Aluminum Processing Rate Dips to 64.6% WoW, Resilience Noted Amid Stronger Export and Domestic Demand [SMM]

Published: Apr 23, 2026 22:27

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This week, the aluminum processing industry maintained resilience, supported by export price spread incentives and domestic demand from energy storage, packaging, and other sectors. However, weak architectural profiles, expectations for PV production cuts, and the holiday effect on secondary aluminum dragged overall operating rates slightly lower, with divergence persisting across segments.

April 23, 2026:

The weekly operating rate of leading downstream aluminum processing enterprises in China edged down 0.1 percentage points WoW to 64.6%. The operating rate of primary aluminum alloy continued its slow rebound, up 0.8 percentage points WoW to 57.6%. Marginal improvement in downstream demand drove order recovery, but aluminum prices fluctuating at highs and a mild pace of end-user recovery still constrained upside room. The operating rate of aluminum plate/sheet and strip held steady at 73%, supported by ample can stock and packaging orders, a persistently hot energy storage market, and ongoing repair in automotive sheets & plates, with the overall market trending steadily upward. The operating rate of aluminum wire and cable rebounded 0.4 percentage points to 67.6%, mainly driven by a widening price spread between domestic and overseas markets and export tax rebate incentives. Aluminum stranded wire exports regained new orders, and production schedule expectations in Hebei rebounded significantly, lifting the industry's capacity utilization rate. The operating rate of aluminum extrusion declined 1 percentage point to 56%. Construction extrusion continued to weaken due to low floor space of buildings completed and downstream fear of high prices, while industrial extrusion faced clear pressure from PV module manufacturers' plans to cut production in May. Automotive extrusion showed no notable incremental growth, and the operating rate was under pressure in the short term. The operating rate of aluminum foil held steady at 75%. Battery foil demand was robust driven by energy storage, and packaging foil export expectations strengthened, but air-conditioner foil was sluggish as the peak season had not yet arrived and channel inventory was at high levels, with some producers shifting to the packaging segment. The operating rate of secondary aluminum producers declined 0.9 percentage points to 58.3%. Downstream orders remained weak, enterprises cut production and started holidays early ahead of the Labour Day holiday, market trading was sluggish, and the decline in finished product prices exceeding that of raw materials squeezed margins, leaving the operating rate under downward pressure in the short term. Overall, the aluminum processing industry maintained resilience this week, supported by export price spread incentives and domestic demand from energy storage and packaging. However, weak construction extrusion, expectations for PV production cuts, and the holiday effect on secondary aluminum dragged overall operating rates slightly lower, with divergence across segments continuing.

Primary aluminum alloy: The operating rate of primary aluminum alloy rose 0.8 percentage points WoW to 57.6%, with the industry continuing its slow rebound. As downstream demand improved marginally, orders and shipments at some enterprises improved compared to the prior period, providing some support for industry operations and edging up the overall operating level. However, aluminum prices stayed high, cost pressure persisted, and the pace of end-use demand recovery remained mild, with relatively limited new market drivers constraining further significant increases in the operating rate. The operating rate of the primary aluminum alloy industry is expected to hold at this week's level next week.

Aluminum plate/sheet and strip: The operating rate of leading aluminum plate/sheet and strip enterprises held steady WoW at 73%. Operations side, the aluminum plate/sheet and strip market performed steadily overall during the week, with leading enterprises maintaining a stable production pace without notable fluctuations. Orders side, domestic end-user can stock and packaging orders on hand were ample, automotive sheets & plates orders were still recovering, the energy storage market remained hot, battery cell prices rose, and top-tier enterprises suspended spot orders to prioritize long-term contract supply. Q2 energy storage shipments grew, providing stable support for energy storage-related battery casings, brazing materials, and other aluminum plate/sheet and strip products. Export side, according to customs data, China's aluminum plate/sheet and strip exports reached 278,200 mt in March 2026, up 21% MoM and 3% YoY. Against the backdrop of a global aluminum shortage, the price spread between domestic and overseas markets widened. However, according to feedback from some export enterprises, export orders only edged up by 5%, with no surge of over 20%, and the price spread between domestic and overseas markets did not directly boost export margins. In the short term, supported by demand from the can stock and energy storage segments and a gradual recovery in automotive sheets & plates orders, the aluminum plate/sheet and strip market is expected to continue its steady upward trend.

Aluminum wire and cable: The weekly operating rate of China's aluminum wire and cable industry rose to 67.6%, up 0.4 percentage points WoW. Following the previous round of surging power grid demand, orders at domestic aluminum wire producers stabilized, with top-tier enterprises maintaining normal production pace. Export side, as the price spread between domestic and overseas markets widened further and aluminum stranded wire carried a 13% export tax rebate, combined with its aluminum content being close to that of aluminum ingots, the cost of exporting aluminum stranded wire and remelting it into aluminum ingots overseas was lower than directly purchasing aluminum ingots ex-China. Driven by the profit spread, producers in Hebei regained new orders, and production schedule expectations rebounded significantly. Therefore, against the backdrop of rising export orders, the industry's capacity utilization rate is expected to further rebound, with producers' operating rates hovering at highs.

Aluminum extrusion: The operating rate of China's aluminum extrusion industry was 56% this week, down 1 percentage point WoW. By segment, construction extrusion continued to weaken. According to feedback from some enterprises in Shandong, new floor space of buildings completed was at a low level, resulting in insufficient release of downstream end-use demand. Additionally, downstream clients had fear of high aluminum prices and took a wait-and-see approach for non-urgent project orders, waiting for aluminum prices to pull back further before placing orders, exacerbating the sluggish state of construction extrusion orders. Industrial extrusion side, automotive extrusion and PV extrusion demand still provided some support for the industry's operating rate, and the operating rate held steady this week, but clear short-term downward pressure existed on the demand side. According to feedback from some enterprises in Anhui, downstream tier-one PV module manufacturers plan to implement production cuts in May, and PV extrusion demand will decline. Looking ahead, once PV module manufacturers' production cut plans are implemented, the demand decline will transmit to the production side. Combined with no notable incremental growth in automotive extrusion, the operating rate of industrial extrusion will be under pressure in the short term. Furthermore, aluminum prices continued to fluctuate at highs, and downstream enterprises maintained a conservative pace of purchasing as needed, making it difficult for operating rates to improve. In the short term, the aluminum extrusion operating rate is expected to continue its downward trend.

Aluminum foil: The operating rate of leading aluminum foil enterprises held steady WoW at 75%. Operations side, leading enterprises had ample orders on hand and maintained a stable production pace. Battery foil demand was robust, driven by energy storage industry growth. Air-conditioner foil performed relatively sluggishly — on the one hand, the market had not yet entered the traditional peak season and home decoration demand had not fully kicked off; on the other hand, air-conditioner finished product channel inventory was at high levels and exports were under pressure with a YoY decline. Some air-conditioner foil producers scaled back this business and shifted to the packaging segment. Export side, according to customs data, China's aluminum foil exports were 118,900 mt in March 2026, up 10% MoM but down 13% YoY. Affected by some double zero foil capacity shifting to battery foil production, actual operating capacity decreased. Combined with tight global aluminum semis supply, packaging foil export expectations strengthened. In the short term, supported by demand from the packaging and energy storage segments, the aluminum foil operating rate is expected to run steadily.

Secondary aluminum: The operating rate of leading secondary aluminum producers declined 0.9 percentage points WoW to 58.3%. Downstream orders remained weak, with enterprises mainly making just-in-time procurement and showing low willingness to proactively restock. Ahead of the Labour Day holiday, some downstream players had already arranged production cuts or holidays in advance, new orders release slowed further, market trading was sluggish, and acceptance of high-priced supply was limited, with prices encountering resistance. Looking ahead to next week, the holiday effect will continue to ferment, with downstream shutdowns and production cuts expanding. Secondary aluminum purchasing demand will weaken further, dragging secondary aluminum producers into continued reductions in operating loads. Meanwhile, recent declines in finished alloy ingot prices exceeded those of raw materials, with theoretical industry profitability continuing to narrow, further suppressing producers' willingness to produce. The industry's operating rate is expected to remain under downward pressure in the short term. After the holiday, attention should focus on the pace of demand recovery and primary aluminum price trends. If no notable improvement is seen on the demand side, there is still room for the operating rate to decline further.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

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