SMM, September 8:
In August 2026, survey data:
According to the SMM survey, the operating rate of the secondary aluminum industry in August 2026 edged up 0.4 percentage points MoM from July to 35.0%, but still fell 6.3 percentage points YoY. Overall production activity in the industry recovered somewhat, but the extent of the recovery remained limited.
By region, operating rates in central China and east China rose 2.4 and 0.7 percentage points MoM respectively, serving as the main sources of growth, while south China and southwest China fell 2.0 and 0.9 percentage points respectively. By enterprise size, the operating rate of medium-sized enterprises rose 1.3 percentage points, large enterprises were basically flat, and small enterprises fell 1.2 percentage points. Overall, large enterprises showed relatively stable production, medium-sized enterprises recovered somewhat, and small enterprises remained under pressure.
Two main factors supported the modest rebound in the industry's operating rate in August. First, some enterprises reported that downstream orders improved slightly from the prior period, while raw material supply also eased somewhat compared with before, driving production schedules to recover at some enterprises. Second, phased changes in the futures and physical markets broadened shipment channels for some enterprises. After futures strengthened and the futures premium widened early in the month, procurement enthusiasm among futures and physical traders picked up, and some producers chose to deliver directly to the futures market. With end-use demand overall weak, futures-and-physical procurement and delivery demand phasedly eased finished product inventory pressure at enterprises, providing some room for enterprises with insufficient orders to release capacity.
However, the industry's overall recovery in August was still constrained by multiple factors. On the one hand, downstream sectors in parts of south China, east China, and southwest China were still in the high-temperature holiday period or demand off-season, and end-use order releases remained relatively limited. On the other hand, some enterprises still faced tight supply of compliant aluminum scrap and other issues, compounded by strengthened environmental protection-related controls in some regions, which limited production recovery to a certain extent. In addition, tax invoice compliance risks and related policy constraints had not been fully eliminated, and enterprises remained cautious in raw material procurement and production, further limiting improvement in the industry's operating rate.
Entering September, as downstream high-temperature holidays largely end and the traditional "September peak season" gradually begins, marginal improvement in end-use demand is expected to boost production scheduling enthusiasm at secondary aluminum enterprises, and the industry's operating rate has room for further recovery. However, based on current market feedback, peak season order releases remain mild, and demand improvement has not yet formed a strong driver. At the same time, issues such as stricter tax supervision in some regions and greater difficulty in procuring compliant aluminum scrap will still constrain enterprise production, and the Mid-Autumn Festival holiday may also phasedly disrupt production and downstream procurement pace at some enterprises. Therefore, the operating rate of the secondary aluminum industry is expected to continue its mild recovery in September, with the overall level unlikely to return to the same period last year. Going forward, close attention should be paid to the fulfillment of end-user orders, changes in tax invoice and compliance policies, the supply of aluminum scrap resources in China and overseas, and the impact of holiday factors on enterprises' production pace.
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Data description: This survey covered a total capacity of 13.11 million mt.
![August Secondary Aluminum Operating Rates Edge Up, Recovery Remains Constrained [SMM Analysis]](https://imgqn.smm.cn/usercenter/bXuQG20251217171651.jpg)
