SMM Analysis: The Two-Month Low-Price War Concludes, Aluminum Rod Processing Fees Reach an Inflection Point

December 21, 2025

According to SMM statistics, as of December 19, 2025, domestic aluminum rod plants' days of inventories reached 4.37, down 0.45 WoW, with inventory continuing its downward trend. In terms of inventory ratio, the domestic aluminum rod plant inventory ratio was recorded at 45.28%, down 6.2% WoW.

During the week, the price center of aluminum slightly decreased WoW. After pulling back to test the 20-day moving average, the price rebounded. Downstream users restocked based on rigid demand while prices pulled back. On the supply side, after digesting inventories from the previous period, supply has returned to a safe level, promoting the aluminum rod processing fee back to a reasonable range. Regarding different processing fees, as of December 19, 2025, by trade region, the aluminum rod processing fee in Jiangsu was quoted at 350-450 yuan/mt, in Hebei at 250-350 yuan/mt, and in South China at 350-450 yuan/mt. For regional aluminum rod processing fees, Shandong quoted 150-250 yuan/mt, Inner Mongolia quoted 100-200 yuan/mt, and Henan quoted 250-350 yuan/mt. Although processing fees have moved away from the bottom, hindered by year-end end-use consumption trends, the market is in a weak dynamic balance. Insufficient expectations on the demand side make it difficult to provide further upside room for processing fees. The aluminum rod processing fee is expected to maintain range-bound movement in the short term, with relatively limited upside room.

This week, the aluminum wire and cable industry's weekly operating rate pulled back 0.4% to 62%, entering a phase of weak decline. Although enterprises are waiting for tender award notifications in December, the tender orders only reflect "strong expectations." The reality of a "weak actual situation" is difficult for companies in the industry to ignore. Many companies reported insufficient sustainability of power grid orders and even expressed concerns about the pace of cargo pick-up next year, worrying about winning tenders without matching orders. For export orders, due to the approaching Christmas holiday, overseas new energy projects slowed down slightly, putting short-term pressure on domestic aluminum wire and cable exports. However, overseas demand remains resilient in the medium and long term. Currently, nearing year-end, end-use demand for wire and cable is weak, with insufficient order support. The operating rate for aluminum wire and cable is expected to show an adjustment trend.