Aluminum Processing Rate Falls to 62.6%, Weakening Prices and Deepening Off-Season Slowdown

uly 2, 2026 –

The operating rate of leading domestic aluminum downstream processing enterprises declined 0.4 percentage point WoW to 62.6% this week, as off-season characteristics deepened and operating rates weakened across all sectors. The operating rate of primary aluminum alloy edged up 0.2 percentage point WoW to 59.6%, with enterprises primarily fulfilling long-term contracts. Although falling aluminum prices boosted inquiry activity, downstream clients remained cautious about further price declines and adopted a wait-and-see approach, limiting new order growth. The operating rate of aluminum plate/sheet and strip slipped 0.6 percentage point WoW to 70.0%, dragged by weak demand for general-purpose civil plate and intensifying steel-for-aluminum substitution among automakers. Cargo pick-up by long-term contract clients slowed significantly. The operating rate of aluminum wire and cable fell 0.4 percentage point WoW to 69.0%, mainly because the closure of the aluminum stranded wire export window and profit losses on export orders led to insufficient new order intake after delivering previously backlogged export orders. Limited domestic power grid orders provided only weak support. The operating rate of aluminum extrusion dropped 0.7 percentage point WoW to 53.7%. Construction extrusion was pressured by both bearish sentiment from falling aluminum prices and the off-season, with weak buying interest. In industrial extrusion, mild demand growth from energy storage equipment provided marginal support, but automotive aluminum extrusion weakened due to accelerating car model iterations and diluted orders. The operating rate of aluminum foil declined 0.4 percentage point WoW to 71.7%, as pharmaceutical and food packaging foil entered the off-season, air-conditioner foil production schedules continued to decline, and clients’ willingness to pick up goods remained low. Enterprises prioritized reducing inventories. The operating rate of secondary aluminum fell 0.5 percentage point WoW to 51.8%. Tight tax invoices and insufficient compliant aluminum scrap supply led to high costs, while downstream off-season conditions persisted with purchases driven by rigid demand. Some enterprises considered increasing the substitution ratio of A00 aluminum, but economic viability was limited. Overall, the aluminum processing industry came under broad pressure this week from a triple hit: deepening off-season conditions, persistent weakness in aluminum prices fueling bearish sentiment, and export contraction. Only a few niche segments like energy storage provided marginal support. Operating rates are expected to continue their downward trend in the near term. Primary Aluminum Alloy: This week, the operating rate of primary aluminum alloy at industry leaders in China reached 59.6%, edging up 0.2 percentage points WoW, and overall operations remained stable. Supply side, industry leaders continued to focus on fulfilling long-term contracts, with no notable adjustment in production pace and no significant changes to production schedules; overall operating rates stayed aligned with existing order demand. Demand side, aluminum prices declined recently, leading to more frequent market quoting activity, but actual transactions remained cautious. As spot pricing models dominated the market, aluminum price fluctuations notably affected buyer and seller sentiment. Some downstream and trading enterprises worried about further price volatility, maintained a wait-and-see procurement pace, and showed weak willingness to actively stockpile. Thus, although the price pullback boosted some inquiry activity, it has not effectively translated into significant new orders, providing limited support for operating rates. In summary, while order delivery at industry leaders was relatively stable, the release of new demand was insufficient, and enterprises lacked strong motivation to hike operating rates. Going forward, the operating rate of primary aluminum alloy at industry leaders is expected to stay around current levels, likely moving sideways near 59.6% in the short term.

Aluminum Plate/Sheet and Strip: This week, the operating rate of aluminum plate, sheet and strip industry leaders slipped 0.6 percentage points MoM to 70.0%. On the enterprise operations front, aluminum prices continued to weaken, falling a cumulative 340 yuan/mt during the week to 22,850 yuan/mt. Combined with the deepening traditional off-season, industry operating pressure intensified significantly. Although industry leaders endeavored to stabilize production by adjusting product mix, overall operating rates still came under visible pressure. In terms of orders, those received earlier were still being processed. On domestic demand: consumption of automotive sheets & plates pulled back slightly, while the trend of automakers substituting steel with aluminum deepened; end-use demand for general-use plates remained persistently weak, downstream cargo pick-up was difficult, and the picking-up pace of long-term contract clients slowed down noticeably. In the short term, although export orders and energy storage demand provided some bottom support, the deepening traditional off-season effect, intensified aluminum price volatility, and spreading wait-and-see sentiment among downstream players jointly weighed on operating performance. The operating rate is expected to continue its downward trend. Aluminum Wire and Cable: This week, the operating rate of China's aluminum wire and cable industry recorded 69.0%, down 0.4 percentage points MoM. During the week, the industry's operating rate ended its previous trend of fluctuating at highs and pulled back marginally. The main reason was the closure of the export window for aluminum stranded wire, where losses on export orders continued to surface. After the previously backlogged export orders were gradually delivered, some enterprises did not receive enough new orders and actively reduced their production load, causing the capacity utilization rate to weaken. Domestically, although the State Grid made deliveries intermittently, the current order volume was relatively limited, providing insufficient support to the overall operating rate, and conductor orders showed mediocre performance. With a notable contraction in export orders and no clear boost from incremental domestic demand, the industry's order structure weakened, and enterprises' willingness to schedule production declined. Overall, the aluminum wire and cable industry is under pressure on both the supply and demand sides in the short term, and the operating rate is expected to continue trending downward.

Aluminum Extrusion: This week, the operating rate of aluminum extrusion fell 0.7 percentage points MoM to 53.7%, perpetuating a weak pattern typical of the off-season. For construction extrusion, the recent persistent decline in aluminum prices generated a fear of further price drops among end-users, significantly suppressing purchasing enthusiasm. Meanwhile, as the traditional off-season deepened, consumption of home decoration doors and windows weakened seasonally; new orders for commercial housing projects remained sluggish. Under multiple overlapping pressures, the operating rate of construction extrusion continued to weaken this week. For industrial extrusion, demand for aluminum extrusion used in energy storage equipment and radiators maintained mild growth. Recently, some enterprises reported a significant increase in orders for aluminum extrusion used in laser equipment accessories, providing some marginal support to the overall operating rate. However, for automotive aluminum extrusion, some enterprises noted that car model iteration in the NEV market is accelerating and the number of competing models in the same class has increased significantly, diluting the sales of car models corresponding to outstanding aluminum extrusion orders. Downstream demand declined, dragging down the operating rate. As the off-season progresses, the aluminum extrusion industry's operating rate is expected to continue falling in the short term.

Aluminum Foil: This week, the operating rate of leading aluminum foil enterprises fell 0.4 percentage points MoM to 71.7%. At the enterprise operation level, the traditional off-season effect in July-August continued to deepen. Pharmaceutical foil and food packaging aluminum foil both entered the off-season, and downstream clients lacked the desire to stockpile. Some enterprises arranged intermittent holidays due to insufficient orders, and industry operating pressure increased notably. In terms of order structure, the air-conditioner foil segment remained under pressure—domestic sales production schedules for household air conditioners still fell 17% in July, and air-conditioner foil production schedules are expected to decline further. At the same time, persistently weak aluminum prices notably affected market sentiment, and downstream clients' willingness to pick up goods was insufficient. Processing enterprises began to review their order structures and delay production schedules for stockpiling-related items. Enterprises generally prioritized controlling production schedules and reducing inventory first. Overall, the deepening off-season, aluminum price fluctuations, and the slowdown in client cargo pick-up will jointly suppress operating performance. The aluminum foil operating rate is expected to continue trending lower in July. Secondary aluminum: This week, the operating rate of leading secondary aluminum producers fell 0.5 percentage points WoW to 51.8%, as dual pressures from raw materials and demand continued to constrain capacity release. Raw material side, affected by tight tax invoices, insufficient supply of compliant aluminum scrap, and traders holding back from selling, aluminum scrap purchase prices stayed high, and enterprises' cost side remained under pressure. During the week, primary aluminum prices pulled back rapidly. The market focused on the feasibility of using A00 to replace part of aluminum scrap. Some enterprises said they would moderately increase the proportion of A00 in their batching to ease the difficulty in sourcing compliant aluminum scrap and the invoice shortage. However, ADC12 production still requires the addition of alloying elements like copper and incurs processing fees such as melting loss. The actual economic viability of A00 is not significant; at this stage, it is more about batching structure optimization rather than large-scale substitution. Demand side, the downstream continued to show off-season characteristics. Die-casting enterprises had limited new orders, and end-use demand from automobiles and other sectors recovered weakly. Although prices pulled back during the week, downstream did not show obvious signs of restocking at lows. Procurement remained mostly need-based, market transactions were mediocre, and demand provided limited boost to production. Overall, against the backdrop of tight invoice supply, stricter compliance supervision, and still insufficient aluminum scrap supply, the pressure on raw material security for secondary aluminum enterprises is hard to ease in the short term. If end-use demand does not improve significantly, the industry operating rate may fall further.