The operating rate of leading domestic aluminum downstream processing enterprises rose 0.6 percentage points WoW to 63.4% this week. By sector, aluminum wire and cable and PV extrusion performed well, mainly boosted by accelerated power grid investment and concentrated PV module deliveries. Aluminum plate/sheet and strip and aluminum foil continued to fluctuate at highs, with the former benefiting from accelerated destocking by enterprises and the latter relying on policy dividends for new energy vehicles and home appliances. The operating rates of primary alloy and secondary alloy slightly increased but lacked momentum, constrained by inventory resistance and losses. Overall, the current acceleration in power grid deliveries, concentrated PV module shipments, and the implementation of special bond projects are expected to support the operating rate of some sectors. However, it is necessary to be cautious about the potential suppression of downstream demand by high aluminum prices, export policy risks, and the impact of weaker-than-expected demand in the real estate chain on the overall operating rate. In the short term, the operating rate of aluminum downstream will continue to show a steady and slow upward trend. SMM predicts that the operating rate will rise 0.3 percentage points to 63.7% next week.
From the Perspective of Different Sections：
Primary aluminum alloy: The operating rate of leading domestic primary aluminum alloy enterprises slightly increased by 0.2 percentage points to 56.0% this week, with the industry's recovery momentum marginally slowing. Supply side, although most enterprises maintained stable production, the continued loose supply of circulating goods, coupled with high in-plant and downstream raw material inventories, significantly limited the industry's production increase. Demand side, constrained by weak new order releases and high aluminum price fluctuations, downstream risk aversion sentiment intensified, maintaining rigid procurement, and spot market activity remained sluggish. SMM expects the industry's operating rate to continue a mild rebound next week, but warns of the negative feedback effect of high aluminum prices on demand.
Aluminum plate/sheet and strip: The operating rate of leading aluminum plate/sheet and strip enterprises remained stable at 71% this week. Production rhythms across sample enterprises showed no significant changes, continuing steady production. With aluminum prices fluctuating upward, leading enterprises accelerated destocking. However, terminal customers' fear of high prices also increased, with orders and cargo pick-ups mainly for rigid demand. If aluminum prices continue to run high and break the 21,000 mark, it may further suppress downstream order and pick-up enthusiasm, potentially impacting enterprise operating rates. The operating rate of leading aluminum plate/sheet and strip enterprises is expected to remain stable or slightly increase in the short term.
Aluminum wire and cable: The operating rate of leading domestic aluminum wire and cable enterprises was 60% this week, up 2% WoW, maintaining an upward trend. In terms of orders, power grid investments continued to accelerate, with related orders continuously emerging. The second batch of material tenders for power transmission and transformation was officially announced on March 21, involving 147,000 mt of aluminum conductor and ground wire orders, to be delivered starting June this year. As March ends and April's power grid project delivery phase approaches, enterprise operations remain prosperous, with the industry's operating rate expected to continue rising in April.
Aluminum extrusion: The operating rate of the aluminum extrusion industry slightly increased by 1 percentage point to 61% this week, with sub-sectors continuing divergent trends. Industrial extrusion, leading automotive extrusion enterprises maintained over 80% operating rates with NEV industry chain orders. However, SMM surveys indicate that some small and medium-sized building material enterprises previously involved in industrial materials reported that automotive extrusion orders are increasingly concentrated in leading enterprises due to complex process certifications and significant equipment investments. Some SMEs faced severe product homogenization, leading to idle industrial production lines this week. PV extrusion, despite ongoing processing fee pressures, benefited from component manufacturers' concentrated delivery periods from March to April, with mainstream PV extrusion enterprises maintaining full production. Construction extrusion, some enterprises reported a recovery in public construction orders due to the initiation of local government special bond projects (e.g., high-speed rail, industrial parks), with construction extrusion operating rates slightly increasing this week. However, civil building material demand remains suppressed by slowed real estate completions, with door, window, and aluminum formwork extrusion enterprises maintaining low operating rates. SMM will continue tracking destocking rhythms during the traditional peak season, focusing on the transmission efficiency of NEV and PV installation demands and the actual boosting effect of local government special bonds on infrastructure projects.
Aluminum foil: The operating rate of leading aluminum foil enterprises remained stable at 75.7% this week. Macro front, the trade-in policy continues to exert force, with stable outputs of aluminum foil products related to NEV and home appliance end-use consumption, such as brazing foil, battery foil, and air-conditioner foil, safeguarding the overall aluminum foil industry's operating rate. On the other hand, India's addition to the anti-dumping duty on Chinese aluminum foil may directly reduce exports to India in the short term, further intensifying the overall pressure on China's aluminum foil exports and adding some instability to the operating rates of leading aluminum foil enterprises.
Secondary aluminum alloy: The operating rate of leading secondary aluminum alloy enterprises slightly increased by 0.4 percentage points to 56.9% WoW. Current orders for large secondary aluminum enterprises are moderate, with operating rates slightly increasing, but overall market demand has not significantly rebounded, and enterprise finished product inventories have increased. Additionally, the price drop of finished alloy ingots this week exceeded the adjustment range of raw materials, leading to expanded theoretical industry losses. Faced with production losses and inventory pressure, some enterprises are considering production cut plans. The industry's operating rate is expected to remain stable or slightly decrease in the short term.
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