Aluminum Prices Surge Post-Qingming Festival, Impacting Extrusion Sector Demand

Following the Qingming Festival, aluminum prices have seen a significant increase, crossing the 20,000 yuan per metric ton ($2760/mt) threshold. This price surge has led to caution among downstream customers, notably affecting order placements across various sectors of the aluminum extrusion industry.

According to data from SMM, aluminum extrusion companies have reported a decline in orders, with the operating rate dropping by 1.80 percentage points to 56.80%. In particular, the construction aluminum extrusion sector in South China managed to maintain moderate order levels, whereas factories in East China experienced a noticeable dip in both order volume and operating rates. This downturn is attributed to the escalated aluminum prices and reduced demand. Notably, some smaller extrusion factories in Jiangyin have significantly scaled down production or temporarily halted operations during the holidays. Additionally, a decline in engineering project orders was observed, with some factories reporting that terminal companies have delayed picking up orders due to postponed construction activities.

In the industrial aluminum extrusion sector, specifically concerning automotive aluminum, demand remains subdued with Original Equipment Manufacturers (OEMs) primarily focusing on inventory digestion. The photovoltaic industry also displayed a similar trend, with downstream enterprises taking a cautious stance and subsequently reducing procurement volumes. This behavior has inevitably impacted supplier orders and operational activity levels.