The operating rate of leading domestic aluminium downstream processing enterprises dropped back slightly by 0.8 percentage points W-o-W to 62.6 per cent, ending an eight-week consecutive increase, and fell by 0.6 percentage points.
By sector, the operating rates of primary aluminium alloy, aluminium plate/sheet and strip, aluminium extrusion, aluminium foil, and secondary aluminium alloy generally pulled back, with only aluminium wire and cable maintaining stable operations. Current downstream consumption showed divergence, with strong support from power grid construction and PV installation demand. Orders on hand for wire and cable enterprises exceeded expectations, and the PV frame sector maintained full production due to new electricity price policies and the pullback in aluminium prices. However, traditional consumption sectors continued to face pressure, with demand for construction extrusion shrinking Y-o-Y, industrial extrusion for the automotive sector dragged down by technical barriers and export fluctuations, and demand for packaging foil and air-conditioner foil showing weakness. Secondary aluminium alloy also remained weak due to sluggish end-user orders in sectors like automotive. In the short term, the aluminium wire and cable sector is expected to maintain high operating rates with the increase in power grid tenders and the PV installation rush, and PV frame demand remains resilient, but the risk of declining processing fees needs to be monitored. Sectors like aluminium plate/sheet and strip and aluminium foil may continue to see slight pullbacks in operating rates due to overseas trade friction and slowing domestic end-user stockpiling. The primary and secondary aluminium alloy sectors may continue to be constrained by insufficient orders and inventory pressure. Close attention should be paid to the impact of US tariff policy adjustments on export orders and the disturbance of aluminium price fluctuations on downstream procurement sentiment. SMM predicts the operating rate may rebound slightly by 0.1 percentage points to 62.7 per cent next week.