Aluminum Prices Rise as Social Inventory Depletes Beyond Expectations; PV Profile Manufacturers Are About to Enter Holiday [SMM Analysis]

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SMM, January 17

PV Aluminum Extrusion:During the week, downstream demand for PV aluminum extrusion showed no improvement. Coupled with aluminum prices fluctuating at high levels, sentiment for component procurement remained moderate.SMM learned that although January component production schedules weakened again, considering factors such as the relatively long Chinese New Year break for aluminum extrusion plants and extended transportation cycles, some component manufacturers stockpiled before the holiday, with procurement volumes only slightly pulling back compared to December. Currently, most aluminum extrusion plants in south China have entered the Chinese New Year holiday, while small and medium-sized enterprises in east China also began to close this week. SMM will continue to monitor downstream demand and holiday schedules.

Raw Material Prices:During the period (2025.01.13-2025.01.17), the average spot price center of aluminum shifted upward. The SMM A00 weekly average price was 20,174 yuan/mt, up 462 yuan/mt WoW, an increase of 2.34%. Overall, on the macro side, mixed signals persisted, with domestic efforts to boost consumption continuing, while inflation sentiment resurfaced in overseas markets. Fundamentals side, supply-side disruptions decreased, spot alumina prices pulled back, but the decline in net prices slowed. Coupled with rising electricity prices during the dry season, aluminum costs remained supported, with over half of the enterprises still operating at a loss. Demand side, as the Chinese New Year holiday approached, aluminum processing plants began to close during the week, leading to a noticeable weakening in demand, and social inventories may enter the holiday inventory buildup cycle. Additionally, attention should be paid to the impact of upstream spot alumina price pullbacks on aluminum costs, as well as the continuity of downstream holiday schedules and pre-holiday stockpiling pace.

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