The proportion of liquid aluminium in January declined, expected to face a significant drop in February

According to SMM statistics, China's aluminium production in January 2026 (31 days) increased by 2.7 per cent Y-o-Y and 0.5 per cent M-o-M.

Overall downstream operating rates trended downward during the month, and the proportion of liquid aluminium also declined, dropping 4.4 percentage points M-o-M to 72.1 per cent, a decrease larger than initially expected. The main reasons include: 1) Demand had not yet recovered due to the off-season impact, coupled with some downstream enterprises starting their Chinese New Year break early; 2) Aluminium prices generally fluctuated at highs in January, putting pressure on downstream profit margins, leading to an overall decline in operating rates; 3) Repeated environmental protection-driven production restrictions in some regions constrained raw material demand. Based on SMM's liquid aluminium proportion data, China's aluminium casting ingot volume in January decreased by 5.9 per cent Y-o-Y but increased by 19.4 per cent M-o-M.

Capacity changes: As of the end of January, SMM statistics show China's existing aluminium capacity was approximately 46.209 million tonnes, and operating aluminium capacity was approximately 44.996 million tonnes.

Production forecast: Entering February 2026, aluminium production is expected to decrease M-o-M due to fewer calendar days. Additionally, some new aluminium projects are expected to steadily commence and ramp up production. Regarding the liquid aluminium proportion, with the Chinese New Year approaching, downstream demand for raw materials is marginally weakening. Combined with the impact of high aluminium prices suppressing demand, downstream demand is further weakening marginally, and enterprises' willingness to cast ingots has significantly increased. The liquid aluminium proportion is expected to decrease significantly by 7.7 percentage points to 64.4 per cent.

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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