PMI for Aluminum Processing Industry Shows Structural Recovery in March—Peak Season Drive Fails to Mask High Aluminum Prices and Export Pressure Concerns [SMM Downstream In-Depth Analysis]

March 28, 2025: According to SMM data, the composite PMI index of China's aluminum processing industry in March 2025 recorded 61.6%, remaining above the 50 mark. Driven by the traditional peak season and favorable policies, the domestic aluminum processing industry showed a structural recovery in March 2025, with PMI in most sub-sectors rebounding above the 50 mark. However, high aluminum price fluctuations, export pressure, and divergent domestic demand still constrained the overall recovery momentum of the industry. The aluminum plate/sheet and strip and aluminum foil sectors benefited from seasonal demand in the automotive and battery sectors and the trade-in policy, with PMI rising significantly to 63.3% and 69.3% MoM, respectively. However, India's anti-dumping duties and weakening overseas orders cast a shadow over exports. Construction aluminum extrusions saw the new orders index break through 70% due to the concentrated release of infrastructure projects, while industrial aluminum extrusions maintained expansion supported by NEV and PV demand. However, small and medium-sized enterprises faced over 50% idle capacity due to technical barriers, exacerbating industry differentiation. The aluminum wire and cable sector saw the production index surge to 73.05% driven by the front-loading of UHV orders, and with the arrival of the power grid delivery phase, the industry's operating rate fully rebounded, with demand expected to continue. Benefiting from increased effective production days and seasonal demand recovery, the PMI of secondary aluminum surged by 27.7 percentage points to 70.4%. However, high aluminum prices suppressed downstream procurement, with primary aluminum alloy and secondary aluminum sectors showing weak recovery and inventory accumulation risks, respectively. Although the new PV policy in April and the peak season for power grid deliveries may extend the growth momentum of some sectors, if aluminum prices break through 21,000 yuan/mt, it may further suppress purchase willingness. Coupled with export pressure and overcapacity among small and medium-sized enterprises, the overall upside room for the industry may be constrained.

By product type:

**Aluminum Plate/Sheet and Strip:** The PMI of the aluminum plate/sheet and strip industry in March was 63.3%, up 8.5 percentage points MoM, remaining above the 50 mark. At the beginning of the traditional peak season, demand in the automotive and battery sectors seasonally recovered, and the trade-in policy during the Two Sessions boosted the industry, showing an upward trend. However, insufficient recovery momentum in consumption and weakening exports MoM constrained growth. The new export orders index in March recorded 64.2%, with overseas orders gradually recovering from the low point before the Chinese New Year. On the other hand, strong aluminum price fluctuations led to increased caution among downstream buyers, with cargo pick-up mainly for just-in-time procurement. If aluminum prices break through the 21,000 yuan mark, it may further suppress procurement enthusiasm. Despite concerns about inventory accumulation and "peak season without peak" in end-use demand, driven by policy expectations and dual domestic and external demand, the PMI of the aluminum plate/sheet and strip industry is expected to remain above the 50 mark in April.

**Aluminum Foil:** The PMI of the aluminum foil industry in March was 69.3%, up 3.7 percentage points MoM, remaining above the 50 mark. The new orders index in March recorded 85.1%, entering the traditional peak season, with demand for air-conditioner foil and battery foil steadily recovering. Leading enterprises stood firm with relatively sufficient orders. Although aluminum price fluctuations suppressed downstream cargo pick-up enthusiasm, the impact on production was limited, supported by the MoM recovery of overseas orders. From a macro perspective, the trade-in policy for home appliances and NEVs benefited sub-sectors such as brazing foil and battery foil. However, India's anti-dumping duties on Chinese aluminum foil may lead to export pressure, bringing more uncertainty. Overall, the supply-demand pattern in the aluminum foil market is relatively stable in the short term, with strong production resilience among leading enterprises. The PMI of the aluminum foil industry is expected to remain above the 50 mark in April.

**Construction Extrusions:** The PMI of construction aluminum extrusions rebounded to 57.52% in March, remaining above the 50 mark. According to the SMM survey, December-February was the traditional off-season, and the production index rose to 58.53% in March with demand recovery. From the raw material side, aluminum prices remained high, with enterprises maintaining only a small safety inventory. The raw material procurement index recorded 60.24%, while the inventory index dropped to 44.15%. In terms of market structure, enterprises improved operational stability by focusing on government-led projects such as infrastructure (high-speed rail/airports) and industrial parks, driving the new orders index to 70.84%, while the proportion of traditional civil extrusion business shrank accordingly. The export sector showed differentiated performance. Although constrained by tariff policies and aluminum prices, related enterprises maintained spot order exports by adjusting overseas order pricing mechanisms, with the export orders index at 49.08%, remaining in the contraction territory. Looking ahead to the traditional peak season in April, the PMI of construction extrusions is expected to have further upside room.

**Industrial Extrusions:** The overall PMI of the industrial aluminum extrusion industry in March was 62.22%, remaining above the 50 mark. Sub-indices showed that the production and new orders indices were 64.33% and 79.64%, respectively, mainly benefiting from steady production growth in industrial extrusions during the month. However, the SMM survey showed that some building material enterprises involved in industrial extrusions began strategic contraction at the end of March. The industrial extrusion capacity of such enterprises mostly accounted for less than 30% of their total capacity. Feedback indicated that the automotive parts manufacturing sector, with high technical barriers, has formed an industrial pattern concentrated in top-tier enterprises. Top-tier enterprises relied on saturated orders from the NEV industry chain, while small and medium-sized enterprises with weak technical reserves generally faced over 50% idle capacity. In the PV extrusion sector, demand for brackets and frames remained strong. Although processing fees remained low, driven by the new PV on-grid tariff policy, component manufacturers' stockpiling demand continued to be released in March-April, with mainstream enterprises maintaining full production. Affected by high aluminum prices, enterprises mostly purchased as needed, with the raw material procurement volume index remaining above the 50 mark (66.58%). Notably, although the industry faces high aluminum prices, processing fees are trending downward. Against the backdrop of intensified market competition, enterprises are generally under pressure to destock and reduce costs, mostly adopting a sales-based production strategy and maintaining only safety inventory, keeping the raw material inventory index at 41.41%. In terms of finished product inventories, some top-tier enterprises in the PV sector conducted preemptive inventory preparation for mainstream products, driving the finished product inventory index to rise slightly to 56.33% this month. Benefiting from the rapid recovery of automotive sector capacity and steady PV demand support, the industry is optimistic about aluminum extrusion demand in April, and the PMI of industrial extrusions is expected to remain above the 50 mark.

**Aluminum Wire and Cable:** The composite PMI index of China's aluminum wire and cable industry in March recorded 59%, up 6.6% MoM, with PMI data in the industry expansion stage. In March, aluminum wire and cable enterprises resumed production in an orderly manner. As the power grid delivery phase in April approached, and UHV and power transmission and transformation orders accelerated, enterprises rushed production during the off-season, driving the capacity utilization rate higher. The production index in March recorded 73.05%, up 26.05% MoM. In terms of new orders, power grid projects such as UHV power transmission and transformation and distribution network orders accelerated, releasing incremental momentum for enterprises' orders on hand. The new orders index recorded 25.59%. As manufacturers resumed production and restocked raw materials for just-in-time procurement, raw material procurement volume increased, with the procurement index recording 54.28%. Finished product inventories also maintained an increasing trend due to subsequent delivery pressure, with the finished product index recording 60.56%. As April approaches, aluminum wire and cable enterprises are thriving, and with the arrival of the power grid delivery phase, the industry's operating rate is fully rebounding. The PMI index of the aluminum wire and cable industry is expected to remain above the 50 mark in April 2025. **Primary Alloy:** The PMI of primary aluminum alloy in March was 57.8%, down 2.2 points MoM. The domestic primary aluminum alloy industry showed a weak recovery in March, with the operating rate of leading enterprises slowly climbing, and the production index recording 68.8%, but the recovery momentum weakened week by week. On the supply side, although the industry gradually returned to the normal liquid aluminum cycle after the Chinese New Year, it was constrained by loose circulating supply, high in-plant inventory, and downstream raw material inventory, limiting production growth. On the demand side, insufficient new orders and strong aluminum price fluctuations led to increased risk aversion among downstream die-casting enterprises, with procurement mainly for just-in-time needs. Spot trades remained sluggish, and the industry's production increase slowed significantly under supply-demand imbalance, with the recovery slope flattening by month-end, highlighting the uncertain future trend of aluminum prices and its suppressive effect on demand throughout the month. SMM expects the PMI of the primary aluminum alloy industry to remain above the 50 mark in April, but the overall improvement space is limited compared to March.

**Secondary Alloy:** The PMI of secondary aluminum in March was 57.8%, down 2.2 points MoM. The domestic secondary aluminum industry showed a weak recovery in March, with the operating rate of leading enterprises slowly climbing, and the production index recording 68.8%, but the recovery momentum weakened week by week. On the supply side, although the industry gradually returned to the normal liquid aluminum cycle after the Chinese New Year, it was constrained by loose circulating supply, high in-plant inventory, and downstream raw material inventory, limiting production growth. On the demand side, insufficient new orders and strong aluminum price fluctuations led to increased risk aversion among downstream die-casting enterprises, with procurement mainly for just-in-time needs. Spot trades remained sluggish, and the industry's production increase slowed significantly under supply-demand imbalance, with the recovery slope flattening by month-end, highlighting the uncertain future trend of aluminum prices and its suppressive effect on demand throughout the month. SMM expects the PMI of the secondary aluminum industry to remain above the 50 mark in April, but the overall improvement space is limited compared to March. **Summary:** With the combined effects of the traditional peak season and policy dividends, the composite PMI of China's aluminum processing industry rebounded to 61.6% in March 2025, entering the expansion territory, with most sub-sectors' prosperity returning above the 50 mark. Aluminum plate/sheet and strip (63.3%) and aluminum foil (69.3%) benefited from seasonal demand in the automotive/battery sectors and the trade-in policy, but India's anti-dumping and shrinking overseas orders constrained export growth. The new orders index of construction aluminum extrusions broke through 70%, while industrial aluminum extrusions maintained expansion supported by NEV/PV demand. However, technical bottlenecks among small and medium-sized enterprises led to over 50% idle capacity, highlighting industry differentiation. The production index of aluminum wire and cable surged to 73.05%, leading the industry, driven by the front-loading of UHV orders and the power grid delivery cycle. The PMI of secondary aluminum surged by 27.7 percentage points to 70.4%, but high aluminum prices suppressed procurement, with primary/secondary sectors showing weak recovery and inventory risks, respectively. Looking ahead to April, although the new PV policy and the peak season for power grid deliveries may extend the momentum of some sectors, if aluminum prices break through 21,000 yuan/mt, it may further suppress procurement. Coupled with export pressure and overcapacity among small and medium-sized enterprises, the overall upside room for the industry may narrow. Click to view the SMM Aluminum Industry Chain Database (SMM Aluminum Team).