Off-Season Combined With High Aluminum Prices, Proportion of Liquid Aluminum Declined in December [SMM Analysis]

SMM December 31 News:

According to SMM statistics, China's aluminum production in December 2025 (31 days) increased by 1.9% YoY and 4.0% MoM. The overall operating rate of downstream sectors showed a downward trend during the month, and the proportion of liquid aluminum also decreased, dropping 0.8 percentage points MoM to 76.5%, a decline exceeding initial monthly expectations. The main reasons include: 1. The impact of the traditional off-season exceeded expectations; 2. Aluminum prices fluctuating at highs further pressured downstream profits; 3. Environmental protection-driven production restrictions in some regions continued to intensify, exceeding initial monthly expectations. Based on SMM's liquid aluminum proportion data, China's aluminum ingot casting volume in December decreased by 13.4% YoY but increased by 7.7% MoM.

Capacity Changes:As of the end of December, SMM statistics show China's existing aluminum capacity was approximately 46.209 million mt, and operating aluminum capacity was approximately 44.608 million mt.

(SMM made revisions after combining capacity replacement situations and old plant demolitions, eliminating some double-counted capacity.)

Production Forecast:Entering January 2026, operating aluminum capacity is expected to increase MoM, with some new aluminum projects expected to steadily commence and ramp up production. Regarding the liquid aluminum proportion, as downstream demand marginally weakens and aluminum prices remain high, enterprises' willingness to cast ingots strengthens, and the liquid aluminum proportion is expected to decrease. Overall, the liquid aluminum proportion is forecast to drop 1.4 percentage points to 75.1%.

[Data Source Statement: Except for publicly available information, other data are processed by SMM based on public information, market communication, and SMM's internal database model, for reference only and do not constitute decision-making advice.]

Data Source: SMM