The weekly operating rate of aluminum processors rose by 0.8%, indicating a mild recovery in downstream consumption 【SMM Weekly Downstream Survey】】

On August 15, 2025:

This week, the overall operating rate of China's downstream aluminum processing leading enterprises rose by 0.8 percentage points MoM to 59.5%, indicating a mild market recovery. In specific segments, the operating rate of primary aluminum alloy increased by 1.0 percentage points to 56.6%, with a notable increase in primary aluminum consumption by top-tier enterprises. The operating rate of aluminum plate/sheet and strip rose by 1.0 percentage points to 65.0%, driven by stockpiling orders for can stock, automotive sheets, and other peak-season products. The operating rate of aluminum wire and cable increased by 0.8 percentage points to 62.6%, as the accelerated power grid construction cycle boosted terminal cargo pick-up. The operating rate of aluminum extrusion slightly rose by 1.0 percentage points to 50.5%, with automotive and PV orders maintaining growth, while construction extrusions remained sluggish. The operating rate of aluminum foil rebounded by 0.9 percentage points to 69.3%, mainly driven by the restart of air-conditioner foil production lines and the recovery of decorative foil demand. The operating rate of secondary aluminum slightly declined by 0.1 percentage points to 53.0%, as the off-season and ongoing losses continued to exert pressure, and policy impacts forced producers to cut production. It is expected that the aluminum wire and cable, aluminum plate/sheet and strip sectors will continue their upward momentum in late August, while the approaching traditional peak season of "September-October peak season" may further boost demand for aluminum foil and aluminum extrusion.

Primary Alloy: This week, the operating rate of primary aluminum alloy rose by another 1.0 percentage points MoM to 56.6%, continuing the recovery trend since July. Against the backdrop of sluggish production growth in the primary aluminum processing sector (aluminum billet/rod), primary aluminum alloy has become an important outlet for liquid aluminum consumption. Some enterprises have maintained capacity utilization rates by adjusting their product mix. The weekly primary aluminum consumption of a certain top-tier enterprise increased significantly by nearly 10% MoM, while another enterprise's production also climbed synchronously, indicating an accelerated process of liquid aluminum alloying. However, it should be noted that the uncertainties surrounding the tariff war have eased somewhat this year, coupled with tentative restocking by downstream producers for the traditional peak season of "September-October peak season", leading to a short-term rebound in primary alloy orders. However, the current increase is mainly concentrated among large-scale enterprises with stable orders, while the production schedules of small and medium-sized enterprises remain constrained by weak end-use demand. Therefore, SMM maintains a baseline judgment of a weak and stable recovery, expecting the operating rate to continue climbing to around 57% in the third week of August. However, due to insufficient substantive improvement in end-use demand, the upside room is limited. Subsequent attention should be paid to the seasonal disruptions caused by high-temperature holidays and the risk of narrowing growth in automotive production. Aluminum Plate/Sheet and Strip: This week, the operating rate of leading enterprises in the aluminum plate/sheet and strip sector continued to increase by 1 percentage point MoW to 65.0%. Aluminum prices stabilized at 20,700 yuan/mt during the week, and the enthusiasm for cargo pick-up among some downstream clients rose again. Coupled with the gradual approach of the traditional peak season, some aluminum plate/sheet and strip enterprises saw an increase in orders on hand, leading to a continuous climb in the operating rate. By product, can stock enterprises reported that their current orders on hand were pre-orders for the Mid-Autumn Festival and National Day consumption stockpiling in late September. Other products, such as curtain wall panels, automotive panels, and 3C materials, also saw downstream clients gradually starting stockpiling actions for the peak season, thus supporting the recovery of the operating rate. As of this week, although downstream stockpiling during the transition from the off-season to the peak season in August fell short of expectations, there was still a certain gap compared to the same period last year, which was sufficient to support enterprise operations. It is predicted that under the premise of stable aluminum prices, the operating rate of aluminum plate/sheet and strip is expected to continue to recover in mid-to-late August.

Aluminum Wire and Cable: This week, the operating rate of leading enterprises in the aluminum wire and cable sector stood at 62.6%, ending two consecutive weeks of flat performance and witnessing a 0.8 percentage point MoW increase. The main reason for the rise in the industry's operating rate was the acceleration of terminal cargo pick-up as the power grid construction cycle approached. However, various parts of the industry are still in a state of disrepair. Orders for aluminum alloy cables are slightly weaker compared to H1, while enamelled wire orders are also operating in the doldrums due to the off-season and the non-implementation of policy subsidies. In terms of orders, the third batch of UHV (Ultra-High Voltage) and the fourth batch of power transmission and transformation material tenders are still ongoing. The third batch of UHV tenders mainly supplement the line materials for the Datong 1000KV UHV line project, involving only 5,000 mt of conductor and ground wire orders. In contrast, the power transmission and transformation projects have tendered over 100,000 mt of conventional conductors + energy-saving conductors, which will be delivered in a staggered manner from November 2025 to April 2026. Various enterprises are expected to receive additional new orders on hand. SMM believes that the operating rate of aluminum wire and cable will be in a stage of slow increase in mid-to-late August, and the industry is expected to emerge from the off-season and transition back to the concentrated delivery cycle of the industry.

Aluminum Extrusion: This week, the operating rate of the domestic aluminum extrusion industry increased by 1 percentage point MoW to 50.5%. The slight increase in the comprehensive operating rate of sampled enterprises was mainly due to new orders for automotive and PV extrusions received by some enterprises. By sector, the construction extrusion sector remained sluggish, showing no signs of transformation. Some enterprises reported that the current decline in processing fees, coupled with long payment terms, had dampened their willingness to take orders. Automotive extrusions maintained stable operations, with some enterprises reporting an increase in downstream procurement volume for automotive extrusions. Enterprises adjusted production according to demand, providing some support for the operating rate. Top-tier enterprises in the PV extrusion sector recently reported good order conditions, maintaining a high operating rate. Small enterprises reported stable order conditions due to their relatively small size and weaker competitiveness, with only small-batch production. A leading PV enterprise stated that despite the current moderate order volume, profit margins had been significantly compressed, so the enterprise had no further expansion plans and would only maintain existing production. Overall, as the September-October peak season approaches, but due to the continued low operating rate in the construction materials sector, it is difficult to see significant changes in the overall operating rate. It is predicted that short-term stable operation will be the main trend. SMM will continue to monitor the actual progress of order fulfillment in various fields. Aluminum foil: This week, the operating rate of leading aluminum foil enterprises rebounded by 0.9 percentage points WoW to 69.3%. By product, some major end-users of air-conditioners have completed production line maintenance, and corresponding air-conditioner foil production lines have restarted. Battery foil and brazing foil production remained stable. The "last-train effect" of policy incentives in H2 provided consumption support, and signs of recovery emerged in the downstream construction sector corresponding to decorative foil. In the short term, the operating rate of leading aluminum foil enterprises is expected to remain stable, with a potential increase after the traditional peak season arrives in September.

Secondary aluminum alloy: This week, the operating rate of leading secondary aluminum alloy enterprises slightly declined by 0.1 percentage points WoW to 53.0%. The overall operating rate of the industry is currently on a downward trend, mainly constrained by the following factors: First, weak market demand: The impact of the traditional off-season persists, with no significant improvement in end-use consumption. Insufficient corporate orders have led to sluggish transactions. Second, losses pressure: Production costs continue to exceed selling prices, forcing some enterprises to cut production or halt operations to digest inventories and prioritize orders from long-established customers. Third, policy adjustment impact: Governments in multiple regions have cleaned up illegal fiscal rebates and incentive policies, prompting some secondary aluminum plants to take production cuts or halt operations to observe the implementation of subsequent policies. In the short term, the industry's operating rate will remain under pressure, and attention should be paid to the implementation of policies and the pace of demand recovery during the peak season.