Oct 14, 2026
China's aluminum rod production in September was 384,000 mt, with producer operating rate at 53.2%. Both production and operating rate trended lower under pressure. The aluminum rod market remained severely oversupplied in September, with suppliers successively lowering processing fees to move accumulated inventory, but downstream buying sentiment stayed subdued due to absolute price levels. According to SMM statistics, as of October 9, days of inventories at domestic aluminum rod plants stood at 10.33 days, up 2.19 days from 8.14 days before the holiday (September 30). The inventory ratio rose from 106.67% to 137.14%, a sharp increase of 30.47 percentage points, mainly driven by the National Day holiday—downstream processing enterprises concentrated maintenance shutdowns during the holiday and the pace of cargo pick-up stalled, while aluminum rod plants mostly maintained continuous production, causing goods to accumulate passively in-factory. This is typical post-holiday seasonal inventory buildup rather than a trend deterioration in demand. Over the same period, the comprehensive operating rate of leading aluminum rod enterprises was 72.85%, basically flat MoM (72.89% on September 24), stabilizing overall in the low range of 72%–73%. After the holiday, aluminum prices fell sharply, downstream buying sentiment rebounded quickly, and active market trading drove destocking at producers. Power grid projects are gradually resuming construction, and PV and wind power installations are expected to recover. With demand repairing, producer inventories are expected to destock further, operating rates are expected to rebound as orders improve, and the center of aluminum rod processing fees is expected to gradually rise.
During the week, aluminum prices showed an overall drift lower, falling from 24,030 yuan/mt before the holiday (September 30) to 23,620 yuan/mt on October 14, a cumulative decline of about 410 yuan/mt. The center shifted notably lower compared with pre-holiday levels, and the weaker aluminum prices provided a clear boost to processing fees. As of October 13, aluminum rod processing fees across all regions rose by 50 yuan/mt from pre-holiday levels (September 30), with Shandong at 200 yuan/mt, Inner Mongolia at 125 yuan/mt, Henan at 400 yuan/mt, Jiangsu at 400 yuan/mt, Hebei at 300 yuan/mt, and Guangdong at 450 yuan/mt. Quotes on October 14 moved further up to the 250–500 yuan/mt range. Under September's oversupply, suppliers successively lowered processing fees to move accumulated inventory, and processing fees had long been under pressure at low levels. After the holiday, the sharp drop in aluminum prices combined with a rapid rebound in downstream buying sentiment significantly boosted market trading activity, driving processing fees up simultaneously across all six regions. Considering that power grid projects are gradually resuming construction and PV and wind power installations are expected to recover, the center of processing fees is expected to gradually rise as demand repairs.
The operating rate of China's aluminum wire and cable industry in September was 54.8%, up 0.6 percentage points from August. The industry operating rate this month underperformed peak-season expectations. Although the power grid re-entered the construction period and manufacturers stockpiled in advance in September, the actual boost was relatively limited. The earlier export concentration period has ended, providing limited support to the current month's operating rate, with end-use orders shifting mainly back to the power grid and new energy sectors. In terms of orders, the fifth batch of tenders for State Grid UHV power transmission and transformation officially began in 2026, with the delivery peak centered around February-March 2027, providing long-term support for consumption in Q1 next year. Focusing on domestic orders, new energy installations are expected to gradually rise in Q4, and end-use demand from the power grid is also recovering mildly. Driven by demand, the operating rate of aluminum wire is expected to maintain its rebound trend.
