Last week, the operating rate of leading domestic aluminum downstream processing companies fell 4.2 percentage points to 55.5%. In terms of sectors, the extrusion operating rate dropped significantly last week. Except for companies that have received urgent photovoltaic orders, they are still rushing to produce and ensure delivery before the year. Most of the other companies concentrated on taking holidays last week, resulting in a significant decrease in business operations. In addition, the operating rate of the secondary aluminum alloy industry also continued to decline, but most major manufacturers will shut down their furnaces next week, so the decline in the operating rate last week was limited. Due to the acceleration of the country's ultra-high voltage construction, most leading companies' shipments remained normal, but some companies have slowed down their production and shipments due to the approaching holidays. The operating rates of other sectors is relatively stable this week. Aluminum plate, strip and aluminum foil manufacturers generally do not suspend production during CNY holiday. Most primary aluminum alloy manufacturers also maintain stable production, but shipments are suspended. In addition, it should be noted that the heavy snowfall in Henan during the week has affected the local truck transportation. There will be some impact in the future, but as downstream customers have completed stocking or have gone on holiday, the decline in transportation efficiency will not have much impact on the market at present. Overall, with CNY holiday approaching, more and more aluminum downstream companies are suspending production and taking holidays. Market shipments are declining, and output continues to decline. As the CNY holiday drawing near, the decline in operating rates is expected to continue to expand.
Primary aluminum alloy: The operating rate of leading primary aluminum alloy companies last week was still 49%. During the week, more and more downstream companies began to prepare for the shutdown and stopped accepting goods. The primary aluminum alloy market has subsequently entered an extremely dull stage. A small number of aluminium alloy companies will suspend production and take holidays starting this week. Most aluminium alloy plants are producing steadily, and the industry's operating rate will decline slightly. It is expected that it will return to the status quo after the CNY holiday.
Aluminum plate/sheet and strip: The operating rate of leading aluminum plate/sheet and strip companies last week was still 73.4%. The aluminum plate/sheet and strip market maintained its previous status last week, with leading companies continuing production and actual market transactions being very light. The heavy snowfall in Henan during the week has had a certain impact on local trucking. However, because aluminum strips and downstream customers have completed stocking or have gone on holiday, the decline in transportation efficiency has minimal impact on the overall market. During the Spring Festival, leading plate and strip companies generally produce normally, and the operating rates of leading companies are expected to remain flat in the short term.
Aluminum wire and cables: The operating rate of leading aluminum wire and cable companies last week was 62.4%, down 2 percentage points from last week. Due to the acceleration of the country's ultra-high voltage construction, the shipments of most leading companies have remained normal, but some companies have gradually slowed down due to the approaching holidays. In terms of stocking up, we learned through research that some leading companies, due to their proximity to aluminum rods manufacturers, had suppliers continue to supply during the Spring Festival holiday to meet production needs in February. At the same time, the company said that in February, it was mainly for the production of finished product inventories, and it is expected to start intensive delivery of orders in March, and the delivery pressure is still high. On the supply, due to the shutdown of downstream cable manufacturers for holidays, the aluminum rod supply and demand market has seen low transaction volume and poor demand. In early February, approaching the Spring Festival, most remaining companies will also enter the holiday period. It is expected that the industry will enter the off-season in February, and the overall aluminum cable operating rate may drop significantly.
Aluminum extrusion: In the second week of the year, most domestic aluminium extrusion factories were on holiday last week. As a result, the operating rate dropped significantly, recording 28.50%. Most domestic extrusin companies have holidays this week. Therefore, companies are generally suspending production and reducing production, which has driven the overall domestic aluminum extrusion weekly operating rate to decline. In addition, companies that have previously received photovoltaic urgent orders are still rushing to produce, guaranteed to be shipped before the year. In terms of inventory, affected by the continued sluggish terminal demand, the overall mood of aluminum extrusion factories is not high in stocking. A small number of industrial extrusion companies that only have a 1-3 day holiday have prepared 7-10 days of raw material inventory in conjunction with orders on hand to prepare for production during the CNY. Overall, domestic aluminum extrusion companies have entered the traditional off-season. Next week is the last week before CNY. Companies will suspend production and take holidays, and the operating rate is expected to continue to weaken.
Aluminum foil: The operating rate of leading aluminum foil companies last week remained stable at 75.6%. During the week, the aluminum foil market fluctuated very little as the year-end was approaching. Leading companies generally maintained their previous production pace, but shipments were suspended. The Spring Festival will be ushered in next week, and the entire industry is not expected to see major changes. The operating rate of the aluminum foil industry is expected to remain stable.
Secondary aluminum alloy: The operating rate of leading secondary aluminum alloy companies this week dropped by 3.7 percentage points from last week to 44.4%. The New Year is approaching, and most downstream die-casting factories are entering CNY this week, and have basically completed their inventory preparation. Except for rigid needs or urgent needs, there are few transactions in the market. In addition, considering that their own inventory is not high, secondary aluminum plants in some areas are reluctant to sell. Except for some large factories that are still operating normally this week, most other companies have shut down their furnaces for rest, which has dragged down the operating rate during the week. The resumption time of companies is concentrated around Feb 18 and Feb 24. Overall, except for the extension of the holiday time of individual companies, the holiday time of most manufacturers is not much different from last year, but the market has reported that the number of holiday days of downstream companies has generally increased. Next week will usher in the CNY holiday, when the industry's operating rate will drop sharply.
![Accelerated destocking of aluminum ingots during the peak season supports aluminum prices to hold up well in the short term [SMM Aluminum Morning Meeting Summary]](https://imgqn.smm.cn/usercenter/zjiqN20251217171650.jpg)
