In October, the aluminium processing composite PMI fell 6.8 per cent points m-o-m to 48.9 per cent, dropping below the 50 mark. PMIs for most aluminium processing sectors declined significantly into contraction territory, mainly due to weakening end-use demand and high aluminium prices suppressing activity.
By product type, Aluminium plate per sheet and strip: In October, the aluminium plate per sheet and strip PMI was 47.8 per cent, down 11 percentage points M-o-M, falling sharply into contraction territory. Among the sub-indices, both the production index and the new orders index stood at 45.9 per cent, indicating simultaneous pressure on production and demand. The new export orders index was slightly above the 50 mark at 51.4 per cent, reflecting relative stability in the export market, though insufficient to reverse the overall weakness.
In terms of monthly operations, early in the month, supported by the traditional September-October peak season, leading enterprises demonstrated strong production resilience, with new energy-related production lines such as automotive sheet and battery shells operating at near full capacity.
However, by mid-to-late October, construction-related segments like curtain wall panels were dragged down by funding chain pressures and a rapid decline in orders, becoming the main factor lowering the operating rate. Meanwhile, aluminium prices rising to the RMB 21,000–21,200 per tonne range intensified downstream wait-and-see sentiment, with the purchasing volume index at only 45.9 per cent, indicating more cautious raw material purchasing by enterprises.
The product inventory index remained high at 57.8 per cent, highlighting significant destocking pressure. Overall, as the industry approaches the transition period between peak and off-seasons, expectations of weakening demand are strengthening, and the aluminium plate per sheet and strip PMI is expected to remain below the 50 mark in November.
Aluminium foil: In October, the aluminium foil PMI was 48.5 per cent, down 14 percentage points MoM, falling sharply into contraction territory. Both the production index and the new orders index stood at 47.5 per cent, pointing to weak momentum on both the supply and demand sides. The new export orders index was 51.1 per cent, benefiting from overseas holiday stockpiling demand for Halloween and Thanksgiving, which provided some cushion for packaging foil and container foil exports. Within the month, enterprise operations showed significant divergence: industrial demand-oriented production lines such as battery foil and brazing foil maintained stable orders, supporting steady operating rates among leading enterprises.
However, double-zero foil orders declined due to an early end to the peak season, dragging down overall performance. The raw material inventory index was 46.4 per cent, and the purchasing volume index was 46.4 per cent, reflecting cautious stockpiling strategies among enterprises.
Notably, the issue of processing fees has emerged; affected by declining yield rates, battery foil processing fees are expected to increase in the new year. As the effect of overseas holiday stockpiling gradually diminishes, the operating rate in the aluminium foil industry is expected to decline slightly, and the aluminium foil PMI is projected to remain below the 50 mark in November. Construction aluminium extrusion: The composite PMI for construction aluminium extrusion in October registered 45.79 per cent, remaining below the 50 mark.
According to an SMM survey, although some small enterprises in Hebei and Hunan reported an increase in aluminium formwork orders, the overall industry remained sluggish. Coupled with the fact that construction aluminium extrusion enterprises generally had fewer production days due to the extended National Day holiday, the production index for the month recorded 41.99 per cent, and the new orders index was 43.83 per cent.
Regionally, some medium and large building material enterprises in Guangdong and Shandong operated relatively steadily, while some small enterprises in North China reported a decline in building material orders in October. As the seasonal transition occurs, compounded by the impact of falling temperatures in the north on construction progress, related enterprises have weak expectations for November production. The construction aluminium extrusion PMI is expected to remain below the 50 mark in November.
Industrial extrusion: The composite PMI for the industrial extrusion industry in October was 50.23 per cent, barely staying above the 50 mark. The production index for the month recorded 48.83 per cent. In late October, some enterprises in East China and South China reported that year-end pushes by downstream automakers led to a slight increase in orders for automotive parts, providing some support to the operating rates of related enterprises.
For PV extrusion, major aluminium frame extrusion enterprises in Anhui and Hebei saw production drop by 20-30 per cent this month due to production cuts by downstream module manufacturers. Some solar panel mounting bracket enterprises in Fujian reported that their products are mainly exported to Southeast Asia and Europe, and performance is currently relatively stable. Looking ahead to November, demand for PV extrusion remains weak, while the rail transit and 3C industries are operating steadily, and the automotive, ESS, and power sectors are relatively robust.
However, due to the recent high aluminium prices, existing orders for enterprises are mostly maintained at around one week, and expectations for November are generally weak. The industrial extrusion PMI is expected to fall below the 50 mark.
Aluminium wire and cable: The PMI for China's aluminium wire and cable industry in October recorded 49.2 per cent, falling below the 50 mark, indicating a pullback in industry sentiment. Poor end-user cargo pick-up and high aluminium prices suppressing operating rates were the main drags. In production, affected by losses and slower shipments, the production index fell sharply by 22.1 per cent M-o-M to 53.8 per cent. Although the new orders index increased by 5.4 per cent M-o-M to 53.69 per cent, the order fulfilment pace was hindered by poor end-user pick-up. The finished product inventory index was 47.67 per cent, indicating insufficient willingness among enterprises to build inventory, and the purchasing volume index dropped to 45.34 per cent as operations contracted.
High aluminium prices pushed up costs, with the purchase price index at 50.6 per centsqueezing profits and further inhibiting production. As November begins, orders from State Grid will enter the tender opening phase. By year-end, the task of completing RMB 650 billion in power grid investment needs to be fulfilled, and the tender pace is expected to accelerate, which is favourable for enterprises to secure more orders. However, currently, as year-end approaches, project demand performance remains generally tepid, and the release of end-use demand still needs to be awaited.
If end-user pick-up and the aluminium price trend do not improve, the industry may remain under pressure. Subsequent attention should be paid to marginal changes in aluminium prices and end-use demand.
Note: This article has been issued by SMM and has been published by AL Circle with its original information without any modifications or edits to the core subject/data.
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