September aluminum liquid aluminum falls short of expectations; October expected to edge down [SMM Analysis]

SMM, September 30:

According to SMM statistics, China's aluminum production in September 2026 (30 days) rose 2.2% YoY and fell 3.2% MoM. In September, downstream demand in China recovered somewhat MoM, but processing fees for some processed products remained under pressure, leading to production cuts and halts at some downstream enterprises. Purchase willingness for liquid aluminum subsequently weakened, dragging down the proportion of liquid aluminum output. The liquid aluminum ratio fell 0.5 percentage points MoM to 78.2% during the month, coming in below expectations at the start of the month, with the main reductions coming from parts of central China and South China.

Based on SMM's liquid aluminum ratio calculations, casting ingot production in China fell 6.2% YoY and 0.8% MoM in September.

Capacity changes: As of end-September, SMM statistics showed existing aluminum capacity in China stood at approximately 46.2887 million mt, flat MoM.

Production forecast: Entering October 2026, affected by the National Day holiday, some downstream enterprises will cut or halt production, causing the liquid aluminum ratio to pull back temporarily. Additionally, processing fees for some downstream products still face downside risks, putting pressure on liquid aluminum demand. Overall, the liquid aluminum ratio is expected to fall 0.3 percentage points to 77.9%.

[Data source statement: All data other than public information is processed by SMM based on public information, market communication, and SMM's internal database models, and is for reference only, not constituting decision-making advice.]

Data source: SMM