Secondary Aluminum Industry Remains Under Pressure, May Operating Rate Keeps Dropping and Hard to Stop[SMM Analysis]

May 2026 Survey Data on Operating Rates of Secondary Aluminum Alloy Enterprises by Region and Scale: 

According to the SMM survey, in May 2026, the operating rate of the secondary aluminum industry fell 5.7 percentage points MoM to 34.2%, and dropped 4.0 percentage points YoY. In May, enterprise production generally contracted, primarily under dual headwinds: first, the Labour Day holiday combined with weakening end-use demand led to shrinking orders; second, stricter supervision of "reverse invoicing" and rising compliance costs for aluminum scrap recycling caused a shortage of invoice-carrying supply, leaving enterprises facing the dilemma of "lack of invoices" and losses. The impact was particularly pronounced in east and central China, resulting in a relatively large decline in the operating rate. Although the overall market was under pressure, structural divergence emerged: some enterprises benefited from overseas supply gaps and export price advantages, achieving counter-trend order growth; resources also gradually concentrated toward top-tier players and regions less affected by policies. However, the industry as a whole became more cautious in taking orders, with enterprises prioritizing the supply of liquid aluminum and the delivery of long-term contracts, and showing insufficient willingness to take low-margin spot orders, which constrained a further recovery in the operating rate.

Entering June, the recovery in the operating rate has been blocked, and a continued decline is expected, mainly constrained by weakening off-season demand and high policy compliance costs. In the short term, the shortage of invoice sources and stricter compliance supervision are difficult to ease, and raw material and tax burden costs will stay high. The future trajectory depends on policy changes: if the invoice shortage persists, the scope of industry production cuts may expand further; if policies are relaxed, there could be an opportunity for the operating rate to rebound.