The operating rate of leading downstream aluminum processors in China recorded 61.0% this week, up 0.8 percentage points WoW. Entering the traditional peak season in September, earlier disruptions were gradually cleared, and operating rates across all segments broadly saw restorative growth. Secondary aluminum and primary aluminum alloy posted the largest gains, while aluminum wire and cable, aluminum extrusion, aluminum plate/sheet and strip, and aluminum foil also recovered. The operating rate of primary aluminum alloy rebounded 1.2% to 59.0%, as the transition into the peak season drove a slight increase in orders, though aluminum price fluctuations dampened downstream purchasing sentiment, leaving limited room for further short-term gains. The operating rate of aluminum plate/sheet and strip edged up 0.2 percentage points to 69.4%, as earlier destocking released room for production ramp-up and energy storage orders remained stable, but weak demand for can stock and construction sheets & plates left the peak season less robust than expected. The operating rate of aluminum wire and cable rebounded 1% to 64.0%, as earlier disruptions cleared and power grid projects entered the execution phase, with the Q4 delivery peak season approaching and operating rates expected to strengthen gradually. The operating rate of aluminum extrusion rebounded to 51.1%, with industrial extrusion performing well on orders from energy storage and new energy vehicles, while construction extrusion remained weak, resulting in an overall mild recovery pattern. The operating rate of aluminum foil rebounded 0.4 percentage points to 71.1%, as peak-season packaging foil orders materialized and new energy demand remained steady, effectively offsetting continued weakness in air-conditioner foil, with a steady climb expected. The operating rate of secondary aluminum rebounded to 51.6%, as marginal improvement in peak-season demand drove a recovery in production schedules, but high aluminum scrap prices and tight compliant raw material supply constrained production release, with mild recovery expected in the near term. Overall, the peak-season effect is gradually emerging and driving a broad recovery in industry operating rates, but a full recovery in end-use demand will take time and cost-side pressures persist, with all segments expected to continue a mild recovery trend in the near term.
Primary aluminum alloy: This week, the operating rate of leading primary aluminum alloy producers in China recorded 59%, up 1.2 percentage points WoW, showing a restorative growth trend. As the traditional consumption off-season gradually transitioned into the peak season in September, downstream demand improved marginally, and some enterprises saw a slight increase in orders, providing some support to upstream supply. At the industry level, enterprises continued to focus on fulfilling annual long-term contracts, but spot order market activity picked up, and overall production schedules recovered somewhat. However, aluminum price fluctuations were pronounced during the week, dampening downstream purchasing sentiment to some extent and limiting the magnitude of demand growth. Overall, while the market has entered a peak-season recovery channel in the short term, uncertainty from aluminum price fluctuations persists, and enterprises remain relatively cautious in ramping up production, with the operating rate of leading producers expected to have limited room for further gains next week.
Aluminum plate/sheet and strip: This week, the operating rate of industry leaders in aluminum plate/sheet and strip rose 0.2 percentage points WoW to 69.4%. At the enterprise operation level, when aluminum prices were relatively low earlier in August, enterprises actively destocked, and current finished product inventory pressure has been somewhat alleviated, freeing up room for a modest production ramp-up. On the order front, with the traditional September-October peak season approaching, can producers have largely completed peak-season stockpiling, and orders on hand for can stock in September are expected to weaken, leaving can stock orders with less support. Orders for aluminum sheets & plates used in construction (curtain wall coils, insulation aluminum skins, etc.) have yet to show a clear rebound, and the renewed rise in aluminum prices this week directly dampened client ordering sentiment. The ESS sector remains highly buoyant, with orders for battery housings, brazing materials, and other products staying steady, representing one of the few sources of certain growth at present. Overall, while some peak-season atmosphere is emerging, it remains insufficient in strength, lacking consumption boosts from more end-use sectors, and the extent of recovery in aluminum plate/sheet and strip operating rates is expected to be limited.
Aluminum wire and cable: This week, the operating rate of China's aluminum wire and cable industry rose to 64.0%, up 1.0 percentage point WoW. Entering September, industry production sentiment is showing a recovery trend, with earlier disruptions from weather and auxiliary material replacements largely cleared, and enterprise production schedules returning to normal. On the demand side, relevant power grid projects are gradually entering the execution phase, driving a steady recovery in wire orders. The release of tender orders from the Southern Power Grid is worth watching, and local projects under the State Grid are also expected to start up gradually in late September, injecting incremental demand for Q4. Overall, as power grid construction accelerates and the peak delivery season for Q4 power transmission and transformation orders approaches, the industry operating rate is expected to strengthen gradually, with subsequent focus on the scheduling and delivery realization pace of State Grid and Southern Power Grid projects.
Aluminum extrusion: This week, the weekly operating rate of China's aluminum extrusion industry rebounded 0.5 percentage points to 51.1%. The construction extrusion segment remained generally stable, with surveyed enterprises reporting that although project-side orders saw a modest release of growth, the recovery momentum remained weak and had not yet formed a trend. Some enterprises in the Guangdong region noted that domestic end-use demand for construction extrusion remains sluggish, though markets outside China, supported by long-term cooperative clients and long-term contracts on hand, are showing strong demand resilience, which can to some extent offset pressure from weakening domestic demand. In the industrial extrusion segment, the operating rate continued to rise this week, with order demand in the energy storage sector maintaining high buoyancy and orders for NEV-related extrusion products growing steadily. Orders in sub-sectors such as power battery trays, industrial motor housings, power round tubes, radiators, and 3C consumer electronics also saw varying degrees of growth. At the enterprise level, most industrial extrusion producers remain optimistic about future order growth, but while orders related to energy storage and NEVs are expanding well, they face issues of low processing fees and long payment collection cycles. Some industrial extrusion enterprises plan to moderately control the scale of such order intake going forward to safeguard processing profitability and mitigate cash flow pressure. Overall, construction extrusion has yet to show clear signs of improvement, while industrial extrusion is showing initial signs of recovery, with the industry as a whole in a mild recovery pattern. China's aluminum extrusion operating rate is expected to continue edging up next week.
Aluminum foil: This week, the operating rate of leading aluminum foil producers rose 0.4 percentage points WoW to 71.1%, with the pace of recovery accelerating. At the enterprise operation level, orders on hand for single zero and double zero foil have been recovering gradually since mid-to-late August, and the current period is the realization phase of order transmission, effectively offsetting the weakness that air-conditioner foil has brought to the overall base. For air-conditioner foil, household air conditioner production schedules in September stood at 9.75 million units, down 7.7% YoY. According to feedback from some air-conditioner foil producers, August production fell 10% YoY, and September production schedules will continue to weaken slightly from August levels. Air-conditioner foil consumption remains weak. Overall, the fulfillment of peak-season orders for packaging foil and robust demand from the new energy sector form a dual driver, which will effectively offset the persistent weakness in air-conditioner foil. The operating rate of aluminum foil is expected to maintain a steady climb.
Secondary aluminum: This week, the operating rate of leading secondary aluminum producers rebounded 1.4 percentage points WoW to 51.6%, as enterprises continued to restore their production pace. September marks the traditional peak consumption season. With marginal improvement in market demand, enterprises have shown greater willingness to schedule production, driving a seasonal rebound in operating rates. However, the recovery in end-use demand remains limited, and enterprises are still generally cautious in their production scheduling. On the raw material side, aluminum prices held up well this week, and aluminum scrap prices remained at a relatively high level. Pressure from compliant raw material supply and procurement costs remained significant, constraining further production release. If orders from major downstream sectors such as automobiles and motorcycles continue to recover as the peak season progresses, enterprises' willingness to schedule production is expected to improve further, and operating rates still have room to rebound. Overall, the industry operating rate continued to recover this week, but remained slightly lower YoY. High raw material costs, demand that has yet to see significant volume growth, and inventory accumulation still constrain production release. In the short term, the operating rate is expected to recover at a mild pace, with focus on the recovery of peak-season orders and changes in raw material supply.
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