Export Boost Lifts PV Frame Demand, Aluminum Ingot Continues Destocking Supports Aluminum Prices [SMM Analysis]

SMM, August 20 -

PV aluminum extrusion: This week, operating rates at PV frame producers in the survey sample showed a modest uptick. The US finalized its new import adjustment rules for polysilicon and its derivatives in early August, with related tariffs set to take effect in December. Driven by expectations of front-loaded shipments during the policy buffer window, marginal growth emerged in export orders from China-based PV module producers destined for the US, indirectly boosting demand for upstream PV frame matching. However, at the current stage, PV frame producers reported sufficient orders on hand, with capacity already at a relatively high level. Coupled with low processing fees and squeezed profit margins in the industry, producers adopted a cautious attitude toward taking new external orders, limiting further upside room for operating rates. Additionally, some frame producers noted that the recent rebound in raw material prices such as polysilicon has increased cost pressure on module production, raising concerns that PV module producers may lower production schedules due to profit considerations, thereby dragging frame demand lower. Going forward, the focus should be on tracking monthly production schedule adjustments of downstream PV modules and the sustainability of ex-China export orders. Overall, in the near term, operating rates at China's PV frame producers are expected to consolidate on a strong note.

Raw material prices: During the period (Aug 17, 2026 - Aug 20, 2026), the SMM A00 weekly average price stood at 23,810 yuan/mt, down 1.4% from the prior weekly average. Overall, macro sentiment fluctuated, frequently disrupting aluminum prices in China and overseas. On the fundamentals side, aluminum ingot inventory continued its destocking trend, providing bottom support for aluminum prices. However, the recovery of the domestic-outside China price ratio, coupled with the digestion of orders on hand, suggested export demand would gradually weaken. Domestic terminal demand performed modestly at best, leading to some market concerns about peak-season demand. In the near term, aluminum prices are expected to consolidate on a subdued note. The most-traded SHFE aluminum contract is projected to trade in a range of 23,200–24,000 yuan/mt next week, while LME aluminum is expected to range between 3,150–3,250 $/mt. Going forward, attention should be paid to the demand trend of China's aluminum semis exports.