Ending Unbridled Growth: Air Conditioning Aluminum Foil Faces High Inventory Challenges, Seeking High-End Pathways Under Policy Guidance

Air-conditioner aluminum foil refers to specialized aluminum foil used for the fin sections of heat exchangers in air conditioners, primarily serving functions such as heat conduction, corrosion resistance, and structural support. As an important segment of the aluminum foil industry, air-conditioner aluminum foil, with its excellent thermal conductivity, corrosion resistance, and formability, has become a key material in manufacturing air conditioner heat exchangers. Driven by the dual forces of the "dual carbon" goals and consumption upgrades, the air-conditioner aluminum foil industry is demonstrating steady growth in the Chinese market.

Shifting Supply Landscape of Air-Conditioner Foil and Strategic Breakthroughs Amid Production Cuts and Product Diversification

According to SMM surveys, China's production of air-conditioner aluminum foil experienced significant fluctuations from 2021 to 2025. In 2021, with post-pandemic economic recovery, China's home appliance exports performed strongly, and aluminum foil production grew steadily to approximately 980,000 mt. During 2022-2023, driven by positive expectations from the domestic 14th Five-Year Plan and extreme summer heatwaves, air conditioner manufacturing activity was brisk, with aluminum foil production reaching 1.04 million mt in 2023. Production continued to increase to 1.06 million mt in 2024, mainly benefiting from stockpiling production by air conditioner enterprises preparing for peak season demand. However, entering 2025, due to persistently high social inventory of end-use air conditioners, aluminum foil production is expected to pull back to 1.02 million mt, representing a reduction of approximately 40,000 mt compared to 2024, a decrease of 3.8%. This change reflects the industry chain's proactive response to inventory pressure. Facing market changes, air-conditioner aluminum foil enterprises have demonstrated considerable flexibility, with some beginning to shift production lines to areas with stronger market demand, such as single-zero packaging foil, since H2 2024. Policy support has also played a crucial role. In April 2025, the Ministry of Industry and Information Technology (MIIT) and nine other departments jointly issued the "Implementation Plan for High-Quality Development of the Aluminum Industry (2025-2027)", which explicitly proposes enhancing the supply of high-end products. Through measures like strengthening upstream-downstream coordination and creating model projects, the plan aims to expand the application of aluminum products in areas such as heat exchange aluminum pipes for air conditioner heat exchangers, charting a course for the sustainable development of the air-conditioner aluminum foil industry.

Production-Sales Dynamics Amid High Inventory: Challenges and Responses in the Air Conditioner Industry Chain

The Chinese household air conditioner market exhibited a notable characteristic of "high production, high inventory" from 2021 to 2025. From the production perspective, SMM data shows that since 2023, although air conditioner production has experienced seasonal fluctuations, it has generally remained at high levels. Specifically, in 2025, production reached 24.848 million units in January, 22.42 million units in March, and 20.812 million units in May, showing typical peak production season characteristics. This high-level operation was primarily supported by export orders and expectations for the domestic summer peak season, with enterprise operating rates consistently high, directly boosting short-term demand for air-conditioner aluminum foil. Analyzing sales, according to ChinaIOL data, the total sales of household air conditioners from January to September 2025 reached 163.451 million units, up 5.4% YoY. Domestic sales were 90.813 million units, an increase of 8.0% YoY, mainly benefiting from the continued promotion of the "trade-in" policy and a sales surge driven by extreme summer heatwaves. Exports were 72.638 million units, up 2.2% YoY, with growth significantly slowing compared to previous periods, primarily constrained by factors such as US tariff increases and high overseas inventories. The inventory situation is particularly noteworthy. Household air conditioner enterprise inventory gradually increased from 16.319 million units in 2022 to 18.822 million units by September 2025, hitting a three-year high. The primary reason for high inventory is the accumulation of significant social inventory due to previous rapid growth, while end-use consumption demand failed to keep pace. Policy Support from Dongfeng Drives Demand Transformation, Air Conditioning Aluminum Foil Enters a Phase of Adjustment

Looking ahead, China's air conditioning aluminum foil industry is expected to enter a new development stage. On the supply side, the production of air conditioning aluminum foil is projected to maintain a mild growth trend, with an annual growth rate estimated to stay within the 2-3% range. As the High-Quality Development Plan for the Aluminum Industry is gradually implemented, the "aluminum as a substitute for copper" policy will continue to advance, providing policy support for the expanded application of air conditioning aluminum foil in both residential and commercial air conditioning sectors. On the demand side, although the domestic sales market is constrained by the slowdown in completed real estate area, the continued implementation of the "trade-in" policy will continue to provide support to the market; the export market, against the backdrop of increasing uncertainty in the global trade environment, will enter a phase of adjustment, and enterprises need to actively explore emerging markets and optimize the structure of exported products. From the perspective of industry chain collaboration, the characteristic of "high production, high inventory" in the air conditioning sector will persist. It is particularly noteworthy that, with the significant overdraw on the demand for air conditioners in existing homes due to extreme global heatwaves in recent years, and the impact of the decline in new construction starts in China on subsequent completions, the new demand for air conditioning aluminum foil after 2026 will still face certain pressures.