PV frame operating rates continue to hold up well, while long-term surplus still weighs on aluminum prices [SMM Analysis]

SMM, July 23:

PV Aluminum Extrusions: This week, the operating rate among sampled PV frame enterprises continued to hold up well. According to SMM, downstream module enterprises' Q3 production schedules are expected to be slightly higher than Q2 levels, primarily driven by preparations for the year-end installation rush for centralized PV projects in China and the supplement of export orders. However, overall growth remained conservative, with limited MoM increases and no clear signs of significant volume expansion. A leading PV frame enterprise reported it would maintain full capacity through July, while another noted its orders on hand have been scheduled through the end of Q3. Overall, the operating rate of PV frame enterprises is expected to consolidate on a strong note in the short term.

Raw Material Prices: During the period (July 20–July 23, 2026), the weekly average price of SMM A00 aluminum ingot was 23,175 yuan/mt, up 0.1% from the previous period. Overall, the macro front sentiment improved slightly recently. Persistent geopolitical risk premium in the Middle East and continuous destocking of aluminum ingots in China jointly underpinned aluminum prices. However, sustained capacity additions for aluminum outside China over the long term, weak end-use demand in China's traditional sectors, and recurring macro-level uncertainties exerted visible pressure on aluminum's upside room. In summary, aluminum prices are expected to maintain a consolidation pattern in the short term. The most-traded SHFE aluminum contract is expected to trade within a range of 22,800–23,500 yuan/mt next week, while LME aluminum is expected to trade within $3,150–$3,220/mt.