Secondary Aluminum Operating Rate Plunged in February March Recovery Was Set to Rebound Significantly [SMM Analysis]

Survey Data on the Operating Rates of Secondary Aluminum Alloy Enterprises by Region and by Scale in February 2026: 

According to the SMM survey, the operating rate of secondary aluminum producers in February 2026 fell by 18.1 percentage points MoM from January to 23.2%, down 9.4 percentage points YoY. In February, operating rates of enterprises across all regions declined sharply.

Affected by concentrated production suspensions during the Chinese New Year, enterprises’ effective production days shortened significantly, and most enterprises saw production declines of 30–50%, leading to a marked contraction on the supply side. In addition, environmental protection-related controls tightened in some regions ahead of the holiday, and with detailed fiscal and tax policy rules such as “reverse invoicing” yet to be clarified, enterprises became more cautious in production. Some enterprises started the holiday early or delayed resuming operations, and a few even approached a full-month shutdown.

Demand also remained weak. Beyond seasonal holiday factors, multiple factors—including pre-holiday destocking by manufacturers, adjustments to purchase tax policies for new energy vehicles, and end-use consumers waiting to see spring auto show promotions—dampened auto production and sales in February, putting secondary aluminum producers’ orders clearly under pressure.

Looking ahead to March, as the industry chain fully resumes operations and automakers’ production schedules gradually recover, both supply and demand are expected to recover in tandem. The industry operating rate is expected to rebound week by week and move closer to normal pre-holiday levels. However, the pace of recovery will still depend on the actual materialization of end-user orders: if demand recovers mildly, the operating rate will rise at a relatively moderate pace; if orders are released in a concentrated manner, together with further clarification of policy expectations, the operating rate is expected to rebound quickly to a relatively high level.