Aluminum Wheel Exports Hit a Three-Year High in January, but Faced a Waterloo in February [SMM Analysis]

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SMM News on March 30, 2025:

Customs data showed that China exported 155,300 mt of aluminum alloy wheel hubs from January to February 2025, a slight increase of 1% YoY. Among them, China exported 88,800 mt of aluminum alloy wheel hubs in January 2025, a significant increase of 17.6% MoM from December 2024. Notably, the export volume of aluminum alloy wheel hubs in January this year hit a new high since January 2022, with a steady small increase YoY compared to 88,100 mt in January last year. SMM believes this is closely related to the "rush to export" behavior under the expectation of tariff hikes. In February 2025, China exported 6.65 mt of aluminum alloy wheel hubs, a sharp decrease of 25.1% MoM from January, but still a steady small increase MoM compared to 6.57 mt in the same period last year.

In terms of export destinations, the top five export destinations for aluminum wheels in December were the US, Japan, Mexico, South Korea, and Thailand. The export volumes to these five countries accounted for 29%, 19%, 11%, 9%, and 5% of the total aluminum wheel exports, respectively. Compared to the previous month, the US regained the top spot, with its share increasing by 2% to 29%, while Japan's share dropped from 24% to 19%. Due to market concerns that a new round of trade and tariff wars might be triggered after Trump took office in late January 2025, the US, Mexico, Canada, and other related countries became the key targets of the "rush to export" in the aluminum wheel industry in December. Data showed that US wheel exports increased by 15% MoM, while Mexico and Canada's wheel exports increased by 31% and 18% MoM, respectively. Meanwhile, the export shares of Japan and South Korea declined.

At the same time, Mexico replaced South Korea to return as the third-largest export destination for aluminum wheels in December. SMM analysis suggests that most wheels shipped to Mexico were assembled locally and then entered the US as complete vehicles. As Mexico was the first to be affected in the recent tariff war, this directly led to a sharp increase in the country's demand for Chinese aluminum wheels in the short term, which may be the main reason for the significant growth in Mexico's wheel exports in December.

SMM believes that although aluminum wheel exports stopped declining and rebounded at the end of 2024, this was mainly driven by the industry's "rush to export" behavior under the expectation of tariff hikes.Notably, in recent years, the export volume of aluminum wheels to the top five export destinations has always accounted for more than 60% of the total export volume, and in the past two months, the export volume to the top three destinations alone has reached 60%, indicating an over-reliance of China's aluminum wheel market on certain countries. With the rise of trade protectionism and the implementation of a series of tariff policies, the overseas market prospects for aluminum wheels are concerning. Although some companies have recognized the risks and started to explore other markets, return to the domestic market, and build factories overseas, in the short term, aluminum wheel exports will still face challenges.It is expected that aluminum wheel exports may show an overall downward trend in H1 2025.

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