ADC12 Aluminum Alloy Prices Drop Amid Weak Demand and Increased Competition

On April 20, Zhang Ruizhong, General Manager of Aluminum Corporation of China, stated at the 2025 annual results briefing that aluminum prices had risen since the beginning of this year, primarily driven by factors such as rigid global supply constraints, energy cost support, and a widening supply-demand gap outside China. He noted that the current high inventory was temporary, and as downstream sectors fully entered the peak season in Q2, inventory would gradually enter a destocking phase. Most Japanese enterprises typically maintained only about two months of inventory for parts or raw materials, meaning that many enterprises may begin to experience supply disruptions by the end of this month or early May.

Due to Japanese manufacturers' heavy reliance on Middle Eastern aluminum metal supplies, several Japanese enterprises were forced to cut production and urgently seek alternative supply sources after the conflict disrupted key shipping routes. The most visibly affected were automakers and parts manufacturers, such as Toyota Motor and Denso Corp. Industry data showed that approximately 70% of aluminum imports by Japanese domestic automakers came from the Middle East. Since the outbreak of this round of conflict, aluminum prices had risen by approximately 13% cumulatively. One of the enterprises already feeling the impact was Kato Light Metal Industries. The company, headquartered in Aichi Prefecture, produces a wide range of aluminum products, primarily for the automotive sectors.

Recently, Huatuo Aluminum's Phase I forging project for an annual production of 1 million forged aluminum alloy automotive wheel hubs successfully completed all construction and equipment commissioning work and was officially put into operation, with an annual capacity of 500,000 automotive wheel hubs. It is understood that Huatuo Aluminum's forging project for an annual production of 1 million forged aluminum alloy automotive wheel hubs has a total investment of 80 million yuan and is being constructed in two phases. Currently, the Phase I project has been in stable operation, and the Phase II project plans to commence in H2 2026.