The operating rate of leading domestic aluminum downstream processing enterprises rebounded by 1.2 percentage points WoW to 62.8%, maintaining a mild recovery trend. By sector, the operating rate of aluminum plate/sheet and strip edged up, benefiting from the recovery of overseas orders and stable demand for batteries and automobiles; the operating rate of aluminum wire and cable increased 3% WoW, driven by accelerated power grid investment and a rush for PV installations; the operating rate of aluminum extrusion rose 3% to 60%, with full production of PV extrusion being a highlight and the NEV chain remaining robust, although construction extrusion still polarized; the operating rate of aluminum foil inched up 0.3%, supported by ample orders from leading enterprises; however, the aluminum alloy sector encountered resistance, with primary alloy constrained by high inventory and aluminum price fluctuations, and secondary alloy hindered by persistently weak end-use consumption. Overall, current demand is primarily supported by PV, NEVs, and power grid infrastructure, while traditional construction extrusion and internal combustion engine vehicles are constrained by financial pressure and weak end-user consumption, failing to meet peak season expectations. Meanwhile, high and volatile aluminum prices continue to suppress downstream procurement. In the short term, the aluminum processing industry is expected to maintain a "stable and rising" trend, but caution is needed regarding the impact of aluminum price fluctuations on cargo pick-up sentiment. SMM predicts that the operating rate will rise another 0.4 percentage points WoW to 63.3% next week.
From the Perspective of Different Sections：
Primary Aluminum Alloy: The operating rate of leading enterprises in the domestic primary aluminum alloy industry remained flat at 55.8% WoW, with the momentum for industry recovery continuing to weaken. On the supply side, although most companies maintained relatively stable production, the overall market was well-supplied, and both in-plant inventory and downstream raw material inventories remained high, resulting in insufficient momentum for further production increases. On the demand side, downstream die-casting enterprises, facing a lack of new orders and high aluminum prices, generally maintained just-in-time procurement driven by risk aversion, leading to persistently low spot trade activity. SMM expects the operating rate of primary aluminum alloys to continue a slow upward trend next week, but attention should be paid to the inhibitory effect of high aluminum prices on downstream demand.
Aluminum Plate/Sheet and Strip: The operating rate of leading enterprises in the aluminum plate/sheet and strip sector rose slightly by 1 percentage point to 71%. During the week, the market performance was stable, with leading enterprises continuing steady production. Overseas orders, after experiencing a low in January and February, have gradually recovered, while domestic end-use demand for batteries, automotive products, and other related items has been relatively stable during the peak season. Both internal and external drivers are expected to push the industry's operating rate to rise slightly in the short term. However, recent fluctuations in domestic aluminum prices have somewhat affected the sentiment for cargo pick-up, and the accumulation of finished product inventories may dampen the production enthusiasm of aluminum plate/sheet and strip enterprises. It is expected that the operating rate of leading enterprises will remain stable or increase slightly in the short term.
Aluminum Wire and Cable: The operating rate of leading enterprises in the domestic aluminum wire and cable industry reached 58%, up 3% WoW. In terms of orders, as temperatures warm and construction projects resume, joint tender orders from various provinces have been announced, and grid investment is accelerating. Additionally, there is a clear trend of a post-holiday rush for PV installations, boosting orders on hand. The seasonal recovery of grid infrastructure and the release of new energy grid connection demand are driving the recovery of the aluminum wire and cable industry. It is expected that the industry will transition from the off-season to a period of intensive deliveries in April, with the continuous release of new orders, maintaining an upward trend in the operating rate.
Aluminum Extrusion: The operating rate of the domestic aluminum extrusion industry increased by 3 percentage points WoW to 60%, showing structural differentiation across application sectors. In the industrial extrusion segment, the new energy-driven pattern continued, with the NEV industry chain maintaining high prosperity, and top-tier enterprises keeping their capacity utilization rates at high levels. Some small and medium-sized processing enterprises achieved order stability by focusing on high-value-added products such as motor housings and battery cell casings. The shipbuilding sector reported that current orders were at normal levels, but the trend towards lighter ship bodies is driving continuous growth in aluminum demand. PV extrusion became the highlight, with mainstream enterprises achieving full capacity production due to surging procurement demand from downstream component manufacturers, and finished product turnover days compressed to within 10 days. Notably, some enterprises have started to build up inventory in advance to meet the "531" grid connection period. The construction extrusion sector showed a polarized trend, with leading enterprises maintaining normal production schedules through channel advantages, but without significant improvement in order structure; small and medium-sized manufacturers, constrained by financial pressure, kept their operating rates low, only maintaining production for cash-on-delivery window and door orders. SMM will continue to monitor industry dynamics, focusing on the pace of end-use demand release and marginal changes in regional industrial policies.
Aluminum Foil: The operating rate of leading enterprises in the aluminum foil sector increased by 0.3 percentage points to 75.7%. With the traditional peak season in March more than halfway through, demand for various aluminum foil products continued to recover. Although recent fluctuations in aluminum prices have somewhat dampened the ordering enthusiasm of downstream customers, the relatively ample orders on hand for leading enterprises have not yet significantly impacted production. The operating rate of leading aluminum foil enterprises is expected to remain stable in the future.
Secondary Aluminum Alloy: The operating rate of leading enterprises in the secondary aluminum alloy industry remained stable at 56.5% WoW. More than halfway through March, terminal consumption in the secondary aluminum market remained sluggish, with downstream enterprises reporting a significant YoY decline in March orders, leading to a reduction in orders for secondary aluminum plants. Due to the failure of the "Golden March" peak season expectations, it has been difficult to raise the production level of secondary aluminum plants, which have mostly maintained stable production. The poor sales have led to a continuous accumulation of finished product inventories. Although the theoretical profit margin for the ADC12 industry remains positive, if the market continues to be depressed, the industry could fall into losses, making production cuts inevitable. In the short term, the industry's operating rate is expected to remain stable, with a focus on the recovery of end-use demand.
