PV Module Factory Production Schedule Strengthens, Supporting Aluminum Demand for PV [SMM Analysis]

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SMM, February 28

PV Aluminum Extrusion: Recently, the PV aluminum extrusion industry has seen a rebound in orders driven by policy support and demand boost from distributed installations. SMM survey shows that leading enterprises have experienced an increase in order volumes compared to the beginning of the year. By the end of February, some downstream module manufacturers raised their procurement volumes for frames, with distributed projects contributing the main increment. Demand is expected to further rebound in April-May. However, despite the rising market enthusiasm, the industry's profit margins remain under pressure. With high raw material costs, many enterprises are caught in the dilemma of "volume discount." Currently, top-tier enterprises maintain stable supply through large-scale production, while some small and medium-sized producers have gradually shifted to supporting products like PV mounting blocks to alleviate profitability pressures.

Raw Material Prices: During the period (2025.2.24-2025.02.28), the center of spot aluminum average prices moved upward. The weekly average price of SMM A00 aluminum ingot was 20,532 yuan/mt, down 0.5% from the previous week's average price. Overall, most suppliers are bullish on the aluminum market outlook, and the inventory turning point is expected to gradually emerge after entering March. With policy support, aluminum ingot inventory is expected to remain low in the long term. Russia's plan to resume aluminum product exports to the US could help narrow the price spread between domestic and overseas markets. However, the US's inconsistent stance on tariffs has left the market in uncertainty. Trump's erratic "tariff stick" has sparked inflation concerns, while interest rate cut expectations remain unpredictable. As March approaches, the domestic market focuses on the upcoming "Two Sessions," which will set economic growth targets and consumption-boosting policies. Fundamentals side, cost side support has slightly stabilized. Ahead of the "Golden March and Silver April," downstream operating rates continue their mild post-holiday recovery. It remains to be seen whether end-use consumption can sustain after entering March. Currently, most suppliers are bullish on the aluminum market outlook, and the inventory turning point is expected to gradually emerge after entering March. With policy support, aluminum ingot inventory is expected to remain low in the long term. East China has already taken the lead in destocking, and sentiment in the spot market to hold back cargoes has intensified. SMM believes that driven by macro sentiment and trading expectations, SHFE aluminum is more likely to rise than fall. The possibility of further escalation of tariff issues and macroeconomic stimulus exceeding expectations could push aluminum prices to challenge 21,000 yuan/mt. The most-traded SHFE aluminum 2504 contract is expected to move between 20,420-21,200 yuan/mt next week, while LME aluminum is expected to range between $2,600-2,730/mt.

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