PV Frame Leading Enterprise Nears Full Production, Aluminum Prices Expected to Fluctuate Upward [SMM Analysis]

Published: Mar 21, 2025 14:55

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SMM Analysis: Leading PV Frame Enterprises Near Full Capacity, Aluminum Prices Expected to Fluctuate Upward Overall, despite the negative macro front in the first half of this week due to overseas trade protection and slowing growth, last night's US Fed March interest rate meeting announced no change in the benchmark rate, in line with market expectations, and signaled a dovish stance for an interest rate cut within the year, boosting market risk appetite and driving aluminum prices to rebound. The favourable macro front in China remains unchanged, with the country focusing on increasing policy efforts and stimulating positive interaction and synergy between market forces to maximize policy effects; three departments have used ultra-long special treasury bond funds to stimulate the renewal of new energy public transport vehicles. Fundamentals side, the aluminum industry chain is still mainly bullish, with the "Golden March, Silver April" seasonal destocking trend becoming more evident, and end-use consumption in NEVs and other sectors steadily growing. SMM believes that mid-week accelerated destocking and supportive policies will maintain short-term prices fluctuating upward. Close attention should be paid to changes in US tariff policies and the actual release of downstream demand. Whether SHFE aluminum can stabilize above 21,000 yuan/mt next week still requires further upward momentum. It is expected that the most-traded SHFE aluminum 2505 contract will trade at 20,600-21,400 yuan/mt, and LME aluminum is expected to trade at $2,640-2,760/mt.

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SMM Mar 21 News:

PV Aluminum Extrusion: PV extrusion manufacturers benefited from active procurement demand from downstream component producers this week, with the industry's operating rate fluctuating at highs. SMM survey found that top-tier enterprises' production lines were basically running at full capacity, with finished product turnover cycles significantly optimized to 7-10 working days. It is particularly noteworthy that, in anticipation of the upcoming "531" annual grid connection deadline, some top-tier enterprises have proactively adjusted their production strategies, preparing inventory for mainstream models in advance to mitigate supply chain volatility risks.

Raw Material Prices: During the period (from March 17 to March 20, 2025 ), the center of spot aluminum average prices moved upward, with SMM A00 weekly average price at 20,760 yuan / mt, down 0.38% from the previous week. Overall, although the first half of the week saw a negative macro front due to overseas trade protectionism and slowing growth, last night's US Fed March interest rate decision to keep the benchmark rate unchanged, in line with market expectations, and signaled a dovish stance with potential interest rate cuts within the year, boosting market risk appetite and supporting a rebound in aluminum prices. The favorable domestic macro front remains unchanged, with the country focusing on increasing policy efforts and stimulating positive interaction and synergy between market forces to maximize policy effects; three departments are using ultra-long-term special treasury funds to stimulate the renewal of new energy public transport vehicles. Fundamentals side, the aluminum industry chain is still predominantly bullish, with the " Golden Three, Silver Four " seasonal destocking trend becoming more evident, and end-use consumption in NEVs and other sectors growing steadily. SMM believes that mid-week accelerated destocking and supportive policies will maintain a strong fluctuation in short-term prices. Close attention should be paid to changes in US tariff policies and the actual release of downstream demand. Whether SHFE aluminum can stabilize above the 21,000 yuan / mt mark next week still requires further upward momentum. The most-traded SHFE aluminum 2,505 contract is expected to run between 20,600-21,400 yuan / mt, while LME aluminum is expected to run between 2,640-2,760 US dollars / mt.

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Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

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