Operating Rate of Aluminum Processing Slightly Declined to 62.4%, Internal Divergence Intensifies as Peak Season Nears Its End [SMM Downstream Weekly Survey]

October 23, 2025:

The operating rate of leading downstream aluminum processing enterprises in China this week was 62.4%, down 0.1% WoW, showing a characteristic of "stabilization during the peak season with internal divergence." Specifically, the operating rate for primary aluminum alloy rose 0.6 percentage points to 59.0%, as enterprise production schedules became more aligned, supported by stable restocking from downstream, and is expected to remain stable with a slight upward trend in the short term. The operating rate for aluminum plate/sheet and strip fell 1 percentage point to 67.0%, impacted by declining curtain wall panel orders and high aluminum prices suppressing purchases, with weakening demand expectations strengthening, and it is anticipated to gradually enter the off-season range. The operating rate for aluminum wire and cable increased 0.4% to 64.4%, supported by the high-voltage sector, but tight shipments and slow cargo pick-up by State Grid limited the rebound potential. The operating rate for aluminum extrusion edged up to 53.7%, with automotive extrusion showing relatively robust growth driven by the year-end push for targets, while construction extrusion remained sluggish and PV extrusion faced production cuts. The operating rate for aluminum foil decreased 0.4 percentage points to 71.9%, with export stockpiling for holidays in packaging foil providing a buffer, but orders for some categories have started to weaken. The operating rate for secondary aluminum producers remained at 58.6%, with order resilience still present, but tight raw material supply, profit pressure, and policy uncertainties continued to constrain production flexibility. Considering the performance on both supply and demand sides, SMM expects the operating rate for the downstream aluminum processing industry to continue its stable trend next week.

Primary Aluminum Alloy: In the third week of October, the primary aluminum alloy sector continued its stable operation, with the operating rate further increasing 0.6 percentage points to 59.0%, remaining within a reasonable range for the traditional September-October peak season. On the production side, enterprise production schedules became more consistent, with previously cautious enterprises due to order uncertainties largely returning to normal production levels, leading to a more stable supply landscape. On the demand side, the restocking process in downstream manufacturing continued, maintaining stable purchases of primary aluminum alloy, and some enterprises reported improved order visibility, supporting a steady rise in the operating rate. As the peak season effect continues to be released, the sector's operating rate is expected to remain stable with a slight upward trend in the short term, potentially approaching the year's high levels.

Aluminum Plate/Sheet and Strip: This week, the operating rate of leading aluminum plate/sheet and strip enterprises fell 1 percentage point MoM to 67.0%. At the enterprise operation level, some enterprises focusing on curtain wall panels, affected by funding chain pressure and rapidly declining orders, were a key factor pulling down the overall operating rate; however, demand in areas such as automotive sheet, battery shells, and brazing materials remained stable, with related production lines operating at full capacity. On the raw material purchasing side, as aluminum prices surpassed the 21,000 mark, downstream wait-and-see sentiment intensified, and enterprises became more cautious in their purchasing attitudes. Industry order dynamics showed no significant fluctuations in core new energy sector orders, but declining orders for other products like can stock and curtain wall panels, combined with purchasing hesitation due to high aluminum prices, further strengthened expectations of weakening demand. As the transition period between peak and off-season approaches, demand for aluminum plate/sheet and strip is expected to decline further after November, and the operating rate of leading enterprises is anticipated to gradually enter the off-season range.

Aluminum Wire and Cable: The weekly operating rate for aluminum wire and cable this week rose 0.4% WoW to 64.4%, showing a slight rebound trend. The main reason for the slight increase was strong performance in the high-voltage sector, providing structural support and driving a slight overall improvement. In terms of enterprise operations, although overall operations remained good, shipments tightened significantly compared to the previous period, showing some divergence between operation and shipments; regarding industry order dynamics, although State Grid tender orders are still being issued sequentially and enterprises have ample tender orders on hand, slow cargo pick-up progress by State Grid dragged on industry performance. Looking ahead to next week, considering the support from high-voltage sector operations but the difficulty in quickly resolving shipment pressures, the operating rate is expected to fluctuate rangebound with limited significant rebound, requiring continuous attention to whether prices and scattered orders like distribution networks can fill the demand gap.

Aluminum Extrusion: The weekly operating rate for the domestic aluminum extrusion industry this week was 53.7%, up 0.2 percentage points WoW. By segment: the construction extrusion market remained sluggish with no significant positive factors emerging yet. According to feedback from leading enterprises in Shandong and Guangdong, affected by seasonal factors, construction material demand is expected to contract in Q4, with the current operating rate still low and related enterprises cautious about long-term orders and operating rates. The industrial extrusion segment showed divergent trends: medium-sized enterprises in Anhui and Hebei reported significant increases in automotive parts orders due to year-end target pushes from downstream automakers, faster cargo pick-up by downstream enterprises, shortened overall production cycles, leading to higher operating rates; PV extrusion faced adjustments, with some leading enterprises cutting production by about 20% this month, and the operating rate pulling back MoM, but the production pace has now stabilized with orderly production based on orders. Overall, the aluminum extrusion industry currently shows a pattern of "sluggish construction, pressured PV, and relatively robust automotive." According to SMM analysis, the industry operating rate will remain stable in the short term, with close monitoring of order changes in various sub-sectors.

Aluminum Foil: The operating rate of leading aluminum foil enterprises this week fell 0.4 percentage points MoM to 71.9%, with the market showing a stable adjustment trend. Industry order dynamics were divergent, with production lines for battery foil and brazing foil basically stable; double zero foil and air-conditioner foil orders showed a declining trend as the peak season ended early, but export stockpiling for overseas holidays like Halloween, Thanksgiving, and Christmas in packaging foil effectively buffered the decline, keeping the overall decrease within a normal correction range. As the support from forward overseas holiday stockpiling gradually weakens and risks of weakening end-use demand persist, the operating rate of leading aluminum foil enterprises is expected to pull back slightly.

Secondary Aluminum: The operating rate of leading secondary aluminum enterprises remained at 58.6% this week, flat WoW. Entering mid-to-late October, secondary aluminum enterprise orders were generally stable, without significant growth compared to September, but market demand resilience remained, and the production pace of leading enterprises was temporarily unaffected. However, overall industry operations still faced multiple constraints: tight raw material supply, high prices squeezing profits leading some enterprises to cut production, and continued policy uncertainties in Jiangxi and Anhui causing some capacity to remain idle. Overall, the operating rate for the secondary aluminum industry is expected to drop back slightly in October.