The core pricing logic of the domestic aluminium market has undergone a fundamental shift. By 2026, China’s total aluminium production capacity has reached the policy-controlled ceiling. With industry-wide operating rates already elevated and room for further capacity expansion effectively exhausted, the sector has formally exited the era of volume-driven growth.
As industrial policies continue to guide the coordinated clustering of aluminium smelting and downstream processing, the traditional analytical framework centred on nationwide aggregate supply-demand dynamics has gradually lost its relevance. The market’s core focus has shifted to three key dimensions, that is, the regional supply-demand rebalancing, the reallocation of cross-regional circulating resources, and the substitution of cast ingots by local deep-processing of molten aluminium.
Currently, major production hubs in Southwest and Northwest China are accelerating the integration of the aluminium industry chains. The proportion of direct molten aluminium supply to deep-processing facilities continues to rise across regions, while the scale of domestically tradable commodity aluminium ingots has entered a trend of structural contraction. This reshaping of the supply-demand landscape has directly given rise to the atypical regional price spread structure observed during the 2026 off-season.
Historically, following seasonal patterns, downstream operating rates typically decline during the traditional consumption off-season, leading to synchronised weakening in aluminium prices across all regions, continuous convergence of inter-regional spreads, and price movements entirely dictated by the strength of end-user demand.