"Aluminum Processing Rebounds 0.3% to 60.3%, Signs of Recovery Emerge Amid Sector Variations"

This week, the operating rate of industry leaders in China’s aluminum downstream processing sector rebounded 0.3 percentage points WoW to 60.3%, ending a multi-week downward trend and showing signs of stopping a decline and recovering. However, performance varied by segment, and the industry as a whole remained in an observation window during the off-season to peak-season transition. The operating rate of primary aluminum alloy producers pulled back slightly by 0.2 percentage points to 57.8%, as the off-season for consumption combined with a rebound in aluminum prices suppressed purchase willingness, leading enterprises to focus on fulfilling long-term contracts, which kept the production decline limited. The operating rate of aluminum plate/sheet and strip producers held steady at 69.2%, with peak-season recovery momentum yet to appear; stockpiling for can stock during the peak season was largely completed, and demand for common plate was suppressed by high aluminum prices, with no concentrated recovery observed in production or sales. The operating rate of aluminum wire and cable producers recovered 0.6 percentage points WoW to 63.0%, as the subsidence of weather disruptions in Jiangsu led to production recovery, and coupled with the implementation of a tender by Southern Power Grid, which provided a demand floor for H2, the industry’s operating rate is expected to continue its mild recovery. The operating rate of aluminum extrusion producers edged down 0.2 percentage points to 50.6%, as architectural extrusion was deeply mired in the off-season, with some enterprises planning to halt production for maintenance, while industrial extrusion edged up, supported by NEV manufacturers stocking up in advance and orders from PV energy storage, but the limited volume could not offset the drag from the architectural segment. The operating rate of aluminum foil producers edged up 0.3 percentage points to 70.4%, as warming peak-season conditions for packaging foil and stable demand for battery foil provided support, but weak demand for air-conditioner foil will constrain the room for further recovery. The operating rate of secondary aluminum producers rebounded 1.1 percentage points to 50.3%, as the recovery of production pace among sample enterprises drove the rate upward, and new orders showed marginal improvement, but high raw material costs and inventory pressure still constrained production release. Overall, this week, the aluminum processing industry stopped falling and rebounded, driven by the subsidence of disruptions in aluminum wire and cable, production recovery in secondary aluminum, and marginal improvements in some segments. However, pressures such as the persistent weakness in architectural extrusion and the lack of a peak-season start for plate/sheet and strip remained. A full recovery of the industry still requires verification through the fulfillment of orders during the “September peak season,” and the operating rate is expected to mainly see mild recovery in the short term. Primary Aluminum Alloy: This week, the operating rate of China's primary aluminum alloy industry leaders came in at 57.8%, pulling back slightly by 0.2 percentage points WoW and remaining in the doldrums. The market was still in the traditional consumption off-season, and end-use demand continued to weaken. Some enterprises have started to moderately adjust their production pace due to order declines, but the overall drop in production remained limited. At the industry level, producers' production schedules still mainly focused on fulfilling annual long-term contracts, with very limited new additions from spot orders, and no significant improvement was seen in overall orders. Aluminum prices rebounded somewhat during the week, further suppressing the purchase willingness of downstream customers and traders. Inquiry and spot trading activity stayed sluggish, exerting a certain drag on operating rates. Overall, the market lacked clear positive drivers in the short term, and enterprises showed insufficient willingness to ramp up production. Industry leaders' operating rates are expected to stay at the current level next week, remaining in the doldrums.

Aluminum Plate/Sheet and Strip: This week, the operating rate of aluminum plate/sheet and strip industry leaders held steady at 69.2% WoW, with no sign yet of a recovery momentum for the peak season. At the operational level, current order backlogs for plain sheet were insufficient; combined with aluminum prices fluctuating at highs, wait-and-see sentiment was thick among downstream end-users, continuously limiting the willingness to stockpile and restock proactively. Neither raw material stockpiling by producers nor cargo pick-up by clients showed any concentrated signs of recovery. For can stock, can makers' stockpiling for the September-October peak season was largely completed, and some can stock orders in September faced a lack of support. For automotive aluminum sheet, multiple factors including weak consumer confidence that led consumers to hold off on spending jointly suppressed end-use demand, directly dragging down the demand release for automotive aluminum alloy sheet. Looking ahead to September, the turning point for an aluminum plate/sheet and strip operating rate recovery during the autumn peak season is still expected to be delayed, and under pressure from weak demand, the rebound in operating rates is expected to be limited.

Aluminum Wire and Cable: This week, the operating rate of China's aluminum wire and cable industry came in at 63.0%, recovering by 0.6 percentage points WoW. The rebound during the week was mainly driven by the recovery of the production pace. Earlier, weather factors in Jiangsu caused some disruptions to production. As relevant auxiliary materials were replaced in a timely manner, this impact gradually faded, and the previously suppressed production schedule recovered successively, providing direct support to operating rates. On the order side, the total winning bid amount in the Southern Power Grid's first batch of framework tenders for conductors in 2026 reached 1.645 billion yuan, providing visible demand support for H2 operating rates. The framework agreement is expected to be signed in mid-to-late September, and the first Q4 orders will gradually be released, gradually materializing the boost. On the export side, the export window for aluminum stranded wire remained in a dynamic state of opening and closing, with limited volume of new order intake and mild boosting power. Overall, with short-term disruptions cleared and the expectation of landed tender orders, the industry's operating rate is expected to continue its mild recovery. Going forward, attention will turn to the cargo pick-up pace of Southern Power Grid framework orders and the implementation of State Grid projects. Aluminum Extrusion: This week, the weekly operating rate of China’s aluminum extrusion industry edged down 0.2 percentage points WoW to 50.6%. The architectural extrusion segment remained mired in the traditional consumption off-season, with no marginal recovery in end-use demand at month-end and no signs of order recovery. According to some architectural extrusion enterprises in Hebei, orders on hand are currently insufficient, and they plan to suspend production for maintenance next month, with industry recovery momentum yet to emerge. Coupled with the recent consolidation of aluminum prices at highs, strong wait-and-see sentiment among downstream end-users persisted, and the willingness to actively stockpile and restock remained constrained, further weighing on the operating load of architectural extrusion and driving it further down. The industrial extrusion segment maintained structural resilience and held up well overall. Enterprises in Anhui reported that as new energy vehicle-supporting car models approach launch, downstream pre-stocking demand was released, driving a slight increase in orders for automaker-supporting extrusion this week. Meanwhile, orders in the PV frame and energy storage structural component sectors remained stable, supporting a marginal increase in industrial extrusion operating rates. However, the localized growth in industrial extrusion was limited in scale and could not offset the drag from weakening architectural extrusion demand, keeping the overall industry operating rate on a downward trajectory. Overall, the market remains focused on the realization of orders during the traditional "September peak season," but architectural extrusion enterprises currently hold cautious expectations for demand recovery in September, with strong wait-and-see sentiment. As a result, the operating rate of China’s aluminum extrusion industry is expected to continue to edge down in the near term.

Aluminum Foil: This week, the operating rate of leading aluminum foil enterprises edged up 0.3 percentage points WoW to 70.4%. At the enterprise level, air-conditioner end-users have largely completed production line maintenance, leading some air-conditioner foil enterprises to slightly raise their production ratios. However, overall consumption has long been weak, and the order recovery was merely satisfactory. On the export front, according to customs data, China’s aluminum foil exports in July 2026 amounted to 119,000 mt, down 9.3% MoM but up 9% YoY. New export orders received in August also declined, with the export side cooling noticeably from Q2. Overall, the mild post-maintenance recovery in air-conditioner foil and steady battery foil provided support, but cooling exports, the packaging off-season, and inventory pressure continued to limit the room for a rebound. In the near term, a recovery in the aluminum foil operating rate will still need to find more consumption support points. The operating rate of leading secondary aluminum producers recovered 1.1 percentage points WoW to 50.3% this week. During the week, the production pace of the sample industry leaders saw some recovery, driving a phased rebound in the industry's operating rate. However, due to limited improvement in end-use demand, enterprises remained cautious in their production schedules, resulting in an overall mild recovery. Raw material side, aluminum prices held up well this week, and aluminum scrap prices remained at relatively high levels. The pressure from compliant raw material procurement and production costs remained significant for enterprises, constraining further production release. Demand side, the market is still in the traditional consumption off-season. However, as the traditional peak season approaches, some enterprises reported that new orders improved compared to earlier periods, showing signs of marginal recovery in market demand. If orders from major downstream sectors such as automobiles and motorcycles further recover, enterprises' willingness to schedule production is expected to increase, leaving room for the operating rate to rebound. Overall, although the industry operating rate rebounded this week, it remained at a low level. High raw material costs, weak off-season demand, and inventory pressure continued to constrain production release. It is expected that the operating rate will mainly undergo mild recovery in the short term. Future focus should be on the sustainability of order recovery during the peak season and changes in raw material supply.