Uncertainty During Policy Transition Period, Focus on Actual Production Situation After Holiday {{SMM Analysis}}

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SMM News on April 30:

PV aluminum extrusion: In the PV extrusion sector, influenced by uncertainties during the policy transition period, current production scheduling strategies of module enterprises have become more cautious. According to the SMM survey, due to the mismatch between the module production cycle and the grid connection deadline, current production orders cannot be completed and connected to the grid before the May 31 period. Coupled with the fact that follow-up policy transition documents have not yet been issued, downstream module producers have generally lowered their demand expectations for May orders by 10%. This week, the operating rates of top-tier enterprises in the PV extrusion sector slightly declined, mainly shifting to execute production schedules for new orders signed in May. Relevant enterprises have no plans to halt production during the Labour Day holiday and will maintain normal production. SMM will continue to track the actual production situation of PV frame extrusions.

Raw material prices: During the period (April 28-30, 2025), the center of the average spot price of aluminum shifted upwards. The SMM A00 weekly average price was 20,010 yuan/mt, up 0.30% from the previous week. Overall, in terms of macro factors, the domestic macro-positive atmosphere remained unchanged. Yesterday, Trump's stance on China regarding his signature tariff policy has softened, improving market sentiment and stimulating a rebound in the futures market. On the fundamental side, the cost side of the aluminum industry remained stable, while the demand side showed signs of structural recovery. Benefiting from the continuous influx of new orders in May, there was an increase in stocking demand for raw materials such as aluminum ingots and aluminum billets before the holiday. The drawdown in domestic aluminum ingot inventory provided support for aluminum prices, but suppliers were eager to sell at higher prices, leading to a pullback in spot premiums. SMM believes that whether substantive easing in Sino-US trade can be achieved remains to be observed over time. In the short term, the imbalance between bullish and bearish factors is still evident. As the transition between the off-season and peak season approaches and the PV installation rush nears its end, there are expectations of a decline in subsequent orders for aluminum downstream. There is insufficient momentum for aluminum prices to rise sharply again, and it is expected that domestic aluminum prices will oscillate mainly before the holiday. SMM expects that next week, the most-traded SHFE aluminum 2506 contract will trade within the range of 19,300-20,200 yuan/mt, while LME aluminum will trade within the range of 2,320-2,470 US dollars/mt.

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