Aluminum Prices Boosted by Macro Factors, but Aluminum Rod Market Remains Sluggish [SMM Analysis]

On February 22, 2025

, Friday, the SMM A00 spot aluminum price was reported at 20,820 yuan/mt, up 220 yuan/mt WoW. This week, macro sentiment remained positive, with overseas tariff uncertainties combined with heightened risk-averse sentiment driving LME aluminum prices higher. Domestically, to boost consumption, the government continued to implement accommodative policies, fostering a bullish market sentiment. This week, the domestic aluminum rod market showed a weak performance. Post-holiday, manufacturers resumed operations as usual, with supply slightly increasing. However, constrained by delivery cycles, demand remained sluggish, with the market primarily driven by rigid demand, leaving processing fees stagnant. Regarding ex-factory processing fees, the average ex-factory price for 1A60 ordinary aluminum rods in Shandong was recorded at 300 yuan/mt; in Henan, it was 350 yuan/mt; and in Inner Mongolia, it was 100 yuan/mt. As for the three major trading regions, the average processing fee on a delivery-to-factory basis for ordinary rods in south China was 550 yuan/mt, while in Hebei, it was 300 yuan/mt, and in Jiangsu, it was 400 yuan/mt, showing little variation in processing fees. In the short term, the market is in a phase of "strong expectations versus weak reality." Although both downstream manufacturers and traders have restocking needs post-holiday, sustainability is constrained by the efficiency of end-use order transmission, with end-use consumption still performing moderately. Therefore, SMM believes that aluminum rod processing fees will continue to fluctuate downward in the short term. Additionally, there is a possibility of further declines in processing fees due to the continued strong performance of aluminum prices combined with supply-side pressure. Future developments will require close attention to the transmission of downstream orders.


This week, the operating rate of leading domestic aluminum wire and cable enterprises remained at 51%, with overall resumption progressing steadily. Although the industry has entered an orderly resumption phase, operating rates showed a slight weakening trend due to insufficient new orders, a YoY reduction in orders on hand, and relaxed delivery cycles. By region, enterprises in south-west China reported good order delivery efficiency, while in northern markets, low temperatures delayed some project progress, putting pressure on delivery efficiency. Overall, the industry's outlook remains cautious. SMM believes that in the short term, the aluminum wire and cable industry will face insufficient upward momentum in operating rates due to weak demand and seasonal construction constraints. Attention should be focused on the release progress of orders from State Grid, which, if materialized, is expected to boost market confidence and support the recovery of industry operations.