As the holiday nears, downstream sectors enter a lull, with aluminum processing weekly operating rates down 1.5% MoM

Published: Feb 5, 2026 21:02

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This week, the comprehensive operating rate for aluminum processing stood at 57.9%, down 1.5 percentage points WoW, remaining generally stable with significant divergence across sectors. The operating rate of primary aluminum alloy dropped to 57.9%, affected by the Chinese New Year break, increased holiday days downstream, and high aluminum prices. Demand continued to weaken, with enterprises proactively cutting production, and a further decline is expected next week.

News on February 5, 2026:

This week, the comprehensive operating rate for aluminum processing stood at 57.9%, down 1.5 percentage points WoW, remaining generally stable with significant divergence across sectors. The operating rate of primary aluminum alloy dropped to 57.9%, affected by the Chinese New Year break, increased holiday days downstream, and high aluminum prices. Demand continued to weaken, with enterprises proactively cutting production, and a further decline is expected next week. The operating rate of leading aluminum plate/sheet and strip producers rebounded to 66.0%, as environmental protection-driven production restrictions ended and stockpiling and shipments accelerated before logistics suspensions. However, support from can stock demand weakened, and a pullback is anticipated next week as stockpiling concludes. The operating rate of leading aluminum foil producers rose to 71.4%, supported by peak season demand for food packaging foil and pharmaceutical foil, alongside an installation rush for batteries. Leading enterprises plan to maintain production during the Chinese New Year, keeping rates high. The operating rate of aluminum wire and cable producers fell to 58%. Although power grid orders were received, weak end-user cargo pick-up and losses led to slower shipments. Enterprises gradually halted operations, with further declines expected next week. The operating rate of aluminum extrusion producers plunged to 36.0%, as enterprises collectively entered the Chinese New Year break. However, demand for PV extrusion remained robust, with leading producers in Anhui and Hebei maintaining high operating rates and retaining production lines. The operating rate of secondary aluminum producers edged down to 58.3%, as weak demand coincided with generally extended furnace shutdown periods. Pre-holiday production contracted noticeably, and the operating rate is projected to drop significantly in February.

Primary Aluminum Alloy: This week, the operating rate of the primary aluminum alloy sector fell 0.5 percentage points WoW to 57.9%, already at a relatively low level for the industry. Supply side, most enterprises proactively cut production due to the traditional off-season, with both production and orders on hand showing slight contraction. Demand side, affected by the Chinese New Year break, downstream enterprises gradually began holidays, and coupled with persistently high aluminum prices, demand weakened further. This year, holiday days for some enterprises increased YoY, leading to a noticeable decline in market activity. Overall, the market remains in the doldrums, with enterprises generally maintaining low-load production. The sector's operating rate is expected to remain under pressure next week, with a slight decline anticipated.

Aluminum Plate/Sheet and Strip: This week, the operating rate of leading aluminum plate/sheet and strip producers rebounded 2 percentage points WoW to 66.0%. At the enterprise operation level, environmental protection-driven production restrictions in central China temporarily concluded, and related enterprises gradually resumed pre-holiday stockpiling pace. Meanwhile, domestic logistics are scheduled to suspend around the 26th of the lunar month, prompting enterprises to accelerate finished product shipments to reduce inventory pressure. Order performance showed that domestic can stock currently maintains full production line rotation, but as pre-holiday shipments are arranged, can stock demand is expected to pull back, weakening its support for operating rates. Low and mid-end products benefited from the pullback in aluminum prices and pre-holiday stockpiling demand, leading to a rebound in operating rates for related production lines. Looking ahead to next week, as the Chinese New Year holiday approaches, most downstream clients have completed pre-holiday stockpiling. The operating rate for aluminum plate/sheet and strip is expected to decrease, showing an overall pullback trend.

Aluminum Wire and Cable: This week, the weekly operating rate for domestic aluminum wire and cable enterprises was 58%, down 2.6 percentage points WoW. The decline was mainly due to the approaching Chinese New Year, leading enterprises to proactively adjust their production pace. Although downstream wire and cable enterprises recently accepted power grid orders matching last week's average price, weak year-end end-user cargo pick-up demand dragged down shipments from top-tier enterprises. The industry overall remains suppressed by seasonal factors. As the Chinese New Year holiday nears, producers will gradually enter shutdown phases next week: some enterprises chose complete shutdowns due to order losses, while others opted to retain minimal capacity, stockpiling in advance to ensure post-holiday delivery efficiency. Notably, the overall holiday period for the industry this year is longer YoY, and combined with limited support from the demand side, the operating rate for the aluminum wire and cable sector is expected to decline further next week.

Aluminum Extrusion: This week, the domestic aluminum extrusion operating rate was 36.0%, down 8.3 percentage points WoW. Entering the first week of February, extrusion enterprises accelerated their Chinese New Year break schedules, with some large extrusion enterprises in Guangdong also beginning to halt operations gradually. As the year-end approaches, extrusion enterprises overall entered the year-end closing phase, with operating rates lower than previous periods. Demand side, as most PV module producers confirmed maintaining production and initiating production increase modes during the Chinese New Year break, leading PV extrusion enterprises in Anhui and Hebei maintained high operating rates this week, with some planning to retain certain production lines during the holiday. Looking ahead to next week, most extrusion enterprises not yet on break plan to start holidays on February 9 (next Monday), with only a very few planning to operate until next Saturday. The extrusion operating rate is expected to decrease further next week.

Aluminum Foil: This week, the operating rate of leading aluminum foil producers rebounded 1.3 percentage points WoW to 71.4%. Demand for food packaging foil and pharmaceutical foil remains in the peak consumption season, coupled with demand driven by the battery installation rush. Leading aluminum foil enterprises generally plan to keep production lines running during the Chinese New Year, maintaining high operating rates. Regarding processing fees, negotiations for battery foil and packaging foil processing fees remain intense, with formal implementation expected in March. Looking ahead to next week, supported by traditional peak season demand, battery installation rush demand, and leading enterprises' non-stop production plans, the aluminum foil operating rate is expected to remain high.

Secondary Aluminum: This week, the operating rate of leading secondary aluminum producers fell slightly by 0.6 percentage points WoW to 58.3%, continuing a weakening trend. Pre-holiday demand cooling is gradually constraining production. During the week, secondary aluminum prices fluctuated significantly, but the price pullback did not effectively stimulate trading volume. Downstream die-casting enterprises, facing persistently weak orders and pre-holiday shutdown expectations, primarily purchased based on rigid demand and opportunistic restocking, with overall low stockpiling willingness. Insufficient order support dragged down the operating rate of secondary aluminum plants. Simultaneously, as the Chinese New Year approaches, pre-holiday production plans for secondary aluminum plants have been clarified. Enterprises mostly concentrate furnace shutdowns and holidays between February 5 and 13, with shutdown periods generally extended by about two days compared to previous years. Under the combined impact of weakening demand and proactive production control, the sector's operating rate is expected to decline significantly in February, with the supply side entering a phased contraction in the short term.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

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