Fluctuating Aluminum Prices at Highs Suppress PV Production: Market Differentiation Amidst Weak Demand and Cost Pressure [SMM Analysis]

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SMM News on May 15:

PV aluminum extrusion: This week, the operating rate of leading enterprises in the PV frame sector only dropped back slightly, with production schedules still following the order rhythm. However, some outsourcing enterprises in east China and Henan reported a sharp decline in PV orders, with operating rates only maintained in the 40%-50% range. SMM will continue to monitor the actual order situation.

Raw material prices: During the period (May 12-14, 2025), the center of the average spot price of aluminum moved upward. The SMM A00 weekly average price was 20,095 yuan/mt, up 2.04% from the previous week's average. Overall, favorable macro factors provided bottom support for aluminum prices, and low inventory further strengthened price resilience. However, off-season pressure on the demand side limited upside room. If breakthroughs are achieved in the US-China negotiations on the Section 232 steel and aluminum tariffs, the global aluminum trade flow will be reshaped, and supply pressure in markets outside the US is expected to ease, further boosting market sentiment. It is expected that the SHFE aluminum price will operate within the range of 19,700-20,300 yuan/mt next week, with a focus on the breakthrough of the previous gap at 20,300 yuan/mt. The LME aluminum price is expected to operate within the range of $2,450-2,520/mt. Subsequent attention should be paid to marginal changes in domestic demand, progress in international trade policies, and the price trend of alumina, as these factors will dominate the short-term fluctuations and medium and long-term trends of aluminum prices.

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