May 28, 2026:
This week, the operating rate of China's leading downstream aluminum processing enterprises was 64.1%, down 0.3 percentage points WoW. The industry overall showed a weak recovery trend, but significant structural divergence persisted internally. The aluminum wire and cable operating rate rose 0.4 percentage points WoW to 68.0%, driven by strong growth in export orders and power grid project support. The aluminum plate/sheet and strip operating rate fell 0.4 percentage points to 72.6%; although high aluminum prices suppressed downstream cargo pick-up, demand for ESS sector battery casings and brazing materials, along with strong growth in new energy vehicle export orders, provided a floor to offset weak demand for standard plates. The primary aluminum alloy operating rate held flat at 58.2%, supported by export resilience, with stable domestic demand; the pullback in aluminum prices drove increased downstream inquiries, but order conversion remained limited. The aluminum extrusion operating rate edged up 0.2 percentage points to 57.6%, as the construction peak season in north China and PV frame order deliveries boosted recovery in construction and industrial extrusion, though weak property recovery continued to weigh. The aluminum foil operating rate fell 0.4 percentage points to 73.6%; ESS battery foil demand was booming, while air-conditioner foil output was dragged down by weak domestic demand and high inventory. The operating rate of secondary aluminum producers dropped sharply by 1.5 percentage points to 54.9%, as raw material shortages and cost pressure persisted, compounded by weak demand, forcing enterprises into production cuts. Currently, the aluminum processing industry overall relies on export resilience, strong ESS growth, and infrastructure orders to offset weak domestic demand. Going forward, attention should be paid to the sustainability of ex-China demand, the impact of aluminum price trends on purchase willingness, and the recovery momentum in traditional sectors.
Primary aluminum alloy: This week, the operating rate of China's leading primary aluminum alloy enterprises held flat WoW at 58.2%. On the supply side, enterprises overall continued normal long-term contract production without significant adjustments to production schedules, maintaining stable operations. Demand showed structural changes. First, the export side continued to perform well, with April aluminum wheel hub export data up 19.43% MoM and up 12.71% YoY, and the recovery in export orders provided some support for aluminum alloy demand. Second, Chinese market demand remained stable overall, with no significant growth drivers emerging. Notably, aluminum prices pulled back recently, and some downstream enterprises began actively placing inquiries and quotes, with purchase willingness improving slightly compared to the prior period. However, as price transmission and order fulfillment still require time, actual transaction increments this week were limited and did not meaningfully boost the current operating rate. Overall, the primary aluminum alloy industry is currently operating steadily, with the operating rate holding at 58.2% for two consecutive weeks. Considering the stimulating effect of the aluminum price pullback on downstream purchase willingness and the gradual increase in inquiry activity, the industry operating rate is expected to edge up slightly next week.
Aluminum plate/sheet and strip: This week, the operating rate of leading aluminum plate/sheet and strip enterprises fell 0.4 percentage points WoW to 72.2%. At the enterprise operation level, some leading aluminum plate/sheet and strip enterprises were suppressed by high aluminum prices and spreading wait-and-see sentiment downstream. The average aluminum ingot price in May remained at a high level around 24,300 yuan/mt, with terminal clients increasingly fearful of price declines and generally adopting a "purchase small volumes as needed, settle at daily prices" model, causing periodic disruption to processing enterprises' shipment pace. By product, domestic terminal can stock and other rigid demand orders remained stable, while the ESS sector showed robust demand for battery casings, brazing materials, and related products, with relevant enterprises ramping up production schedules to ensure delivery, providing floor support for the operating rate. Automotive sheets & plates orders benefited from YoY growth in domestic new energy vehicle production and sales and continued strong export growth, in a recovery phase. On the export front, against the backdrop of global aluminum supply deficit, plate/sheet export orders performed strongly, with enterprise export orders booked through late July. Looking ahead to June, high aluminum prices will continue to dominate market pace. Dragged down by domestic standard plate orders under pressure, the operating rate is expected to maintain a stable-to-weak trend.
Aluminum wire and cable: This week, the operating rate of China's aluminum wire and cable industry was 68.0%, up 0.4 percentage points WoW. The industry operating rate strengthened again during the week, mainly driven by continued volume growth in aluminum wire export orders, with industry procurement volume and shipments maintaining positive growth. Enterprises reported that aluminum stranded wire export order production schedules already cover half a month to two months of orders, driving the operating rate to continue strengthening in the short term. On the demand side, traders reported that as ex-China spot aluminum prices continued to rise, they received considerable orders from Southeast Asia, which were gradually being placed with domestic manufacturers. Supported by current export orders and combined with manufacturers producing domestic power grid project orders as planned, industry shipments still show a growth trend. The operating rate of China's aluminum wire industry is expected to hold up well in the short term.
Aluminum extrusion: This week, the operating rate of China's aluminum extrusion industry was 57.6%, up 0.2 percentage points WoW, with the industry continuing a mild recovery trend. For construction extrusion, some enterprises organized production based on large-scale engineering project orders on hand, providing support for overall operations. Enterprises in the Shandong region reported that temperatures have been steadily rising recently, and north China has entered the construction window period, boosting end-use demand for home renovation and window/door replacement. For industrial extrusion, the recent phased weakening of aluminum prices increased downstream purchase willingness, driving order growth and boosting operations. Additionally, PV frame enterprises in Hebei reported delivery orders arriving in early June, with increased production schedules this week driving operations higher. Overall, although the real estate market recovery remains weak, large-scale engineering orders on hand have volume advantages and longer delivery cycles, providing stable near-term support for operations. Combined with rising temperatures boosting home renovation window and door consumption, construction extrusion operations will continue to recover. Industrial extrusion fundamentals remain resilient with stable downstream manufacturing rigid demand, but caution is warranted regarding subsequent aluminum price fluctuations that may suppress downstream purchase sentiment. Aluminum extrusion operations are expected to continue rising next week.
Aluminum foil: This week, the operating rate of leading aluminum foil enterprises edged down 0.4 percentage points WoW to 73.6%. In terms of order structure, ESS end-use demand remained hot, with May battery production exceeding 80 Gwh and top-tier players' orders booked through Q3 and beyond, providing strong support for battery foil. As double zero foil production lines have been successively switched to battery foil production, packaging foil market supply contracted notably. Against the backdrop of tight global aluminum semis supply, increased export orders further lifted packaging foil prosperity. However, the air-conditioner foil segment became the main drag: June household air conditioner domestic sales production schedules declined sharply YoY, and under high inventory and cost pressure, enterprises were extremely cautious with production schedules. Air-conditioner foil production schedules are expected to decline further. Looking ahead to June, ESS and packaging demand will remain the base for the operating rate, but the clear downward trend in domestic air-conditioner foil orders will continue to drag overall industry output, driving the overall aluminum foil operating rate center to continue shifting lower in June.
Secondary aluminum: This week, the operating rate of leading secondary aluminum producers fell 1.5 percentage points WoW to 54.9%, with production cuts spreading across the industry. As compliant raw material supply remained tight and cost pressure was difficult to pass downstream, enterprises actively or passively reduced production loads. Enterprise raw material inventory continued to be depleted, with limited new restocking volumes, and supply contraction expectations intensified accordingly. Market concerns over tightening future supply sources increased, with low-priced sources notably diminishing. The demand side remained weak, with sluggish downstream order follow-through, overall sluggish transactions, and procurement focused on rigid restocking. Weak demand further dragged down operations. In the short term, under dual pressure from high costs and weak demand, the operating rate of secondary aluminum producers is still trending downward.
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