The composite PMI for the aluminium processing (including downstream) industry in May was recorded at 49.8 per cent, approaching the 50 mark but remaining in contraction territory. It fell by 1.8 percentage points M-o-M and increased by 8.7 per cent Y-o-Y. By sector, in May, the domestic aluminium plate/sheet and strip industry was affected by weak end-use demand and the seasonal off-season, with both the production index and the new orders index falling below the 50 mark.
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However, the easing of Sino-US trade tensions spurred a rush in exports for end-use sectors such as home appliances and electronics, boosting production and alleviating the pressure from insufficient domestic demand. The aluminium foil industry contracted overall, with intensified cut-throat competition in processing fees. Enterprises proactively controlled their production pace to cope with the off-season, but high-end products such as battery foil remained relatively stable, supported by the production and sales of new energy vehicles.
In May, some construction extrusion enterprises in Shandong, east China, and parts of south China maintained stable production based on orders on hand, but the industry as a whole faced sluggish new order. Coupled with the continued sluggishness of real estate-related orders and the delayed transmission of the support effect from local governments, there were still doubts about the sustainability of industry demand. In the industrial materials sector, some leading PV frame manufacturers in east China reported that their production had not yet been affected by the 531 period due to their main cooperation with top-tier enterprises, and new orders for June had already been secured, providing support for production this month.
However, there were no significant changes in the production of automotive extrusion this month, with new orders being sluggish and orders on hand only sufficient to sustain production until mid-June. Production was expected to remain weak next month. In the aluminium wire and cable sector, despite the delivery of orders as planned by leading aluminium wire and cable enterprises in May, the pace of shipments slowed down. Coupled with the high aluminium prices dampening downstream buying sentiment, procurement was relatively cautious.
Aluminium plate/sheet and strip: The composite PMI for the domestic aluminium plate/sheet and strip industry in May was recorded at 49.6 per cent, approaching the 50 mark but remaining in contraction territory. Sub-indices showed that the production index (49.3 per cent) and the new orders index (49.3 per cent) were both slightly below 50 per cent, reflecting the impact of weak domestic end-use demand and the seasonal off-season. The new export orders index (62.1 per cent) was significantly higher than the 50 mark, indicating that exports had become the main support. The easing of Sino-US trade tensions spurred a rush in exports for end-use sectors such as home appliances and electronics, boosting production.
However, domestic consumption as a whole weakened, with short-term support expected from the 618 sales promotions. In the market, the orderly progress of export orders alleviated some pressure, but overcapacity and insufficient domestic demand led to intensified competition in can stock processing fees. The enterprises' procurement volume index (56.1 per cent) indicated cautious raw material stockpiling. Looking ahead to June, the export recovery is unlikely to offset the deepening off-season, and the PMI is expected to remain in the doldrums, with attention needed on the implementation of infrastructure policies and changes in overseas trade conditions.
Aluminium foil: The composite PMI of China's aluminium foil industry in May registered 47.6 per cent, remaining below the 50 mark, indicating an overall contraction. Sub-indices showed the production index (46.3 per cent) and new orders index (46.3 per cent) weakened simultaneously, reflecting sluggish demand-side growth. The new export orders index (60.7 per cent) provided some support, but the purchasing volume index (47.6 per cent) confirmed weak raw material procurement willingness among enterprises.
High-end products like battery foil remained relatively stable, supported by NEV production and sales, while demand for traditional products such as double-zero packaging foil shrank, with intensified cut-throat competition in processing fees. Producers actively controlled production pace to cope with the off-season. Market-wise, eased Sino-US tariffs brought export window benefits, but end-user inventory buildup (e.g., power batteries) and weak domestic demand for air-conditioner foil dampened production enthusiasm.
Looking forward, the deepening traditional off-season coupled with uncertainties in overseas order sustainability suggest the PMI will likely maintain a fluctuating and weak trend, with key focus needed on destocking progress in the NEV industry chain and policy support.
Construction extrusion: The composite PMI for construction aluminium extrusion in May dropped back slightly to 53.90 per cent, staying above the 50 mark. Producers with proprietary door and window brands maintained stable production, while some enterprises in Shandong, east China, and south China reported steady May output supported by orders from long-established customers.
Some firms with infrastructure orders on hand saw slight production increases, pushing the production index to 70.53 per cent and the procurement volume index to 81.56 per cent. However, enterprises in central China and south China that previously relied on government infrastructure projects reported weak new order growth, compounded by limited local infrastructure projects in Shandong, leading the new orders index to slide to 45.88 per cent. According to the SMM survey, producers generally reported limited engineering orders on hand, with real estate-related orders yet to recover.
The industry widely doubts demand sustainability, adopting low raw material inventory strategies due to poor long-term order visibility, keeping the raw material inventory index at 50 per cent in May. Overall, without strong new order support, the construction extrusion PMI in June is expected to stay above the 50 mark but with limited upside room.
Industrial extrusion: The composite PMI for the industrial extrusion sector in May registered 52.23 per cent, barely staying above the 50 mark. Sub-indices showed the production index at 53.45 per cent and new orders index at 54.70 per cent. SMM learned that some PV frame leaders in east China reported uninterrupted production due to collaborations with top-tier enterprises, unaffected by the 531 period, with June orders already secured, supporting May operating rates. However, some small and medium-sized enterprises in Anhui indicated their PV frame orders on hand could only sustain production until mid-June, with no follow-up orders secured by month-end.
The raw material inventory index for this month stood at 46.48 per cent, remaining below the 50 mark. The industrial extrusion sector's PMI is expected to stay in the doldrums in June, and SMM will continue monitoring actual order fulfilment.
Aluminium wire and cable: The composite PMI for China's aluminium wire and cable industry in May registered 51, indicating continued expansion. Although top-tier enterprises delivered goods as scheduled, shipment pace slowed, and small and medium-sized enterprises saw reduced production enthusiasm, with the production index at 49.61 per cent. The second batch of ultra-high voltage orders was finalized in May, replenishing orders on hand for leading firms, while new orders for SMEs declined, with the new orders index at 53.38 per cent.
The purchasing volume index recorded 43.73 per cent. Despite stable production, persistently high aluminium prices dampened downstream buying sentiment, leading to cautious procurement and further declines in in-plant inventory, with the raw material inventory index at 47.67 per cent. The finished product inventory index was 54.08 per cent, mainly due to slightly slower end-user pick-up pace amid steady production, resulting in a marginal inventory buildup.
For June, power grid transmission and transformation orders will provide long-cycle demand support, but new PV installations may weaken, coupled with lacklustre infrastructure orders. The aluminium wire and cable PMI is expected to operate below the 50 mark in June 2025.
By sector, aluminium plate/sheet and strip production and new orders were below the 50 mark, but a rush to export was expected to alleviate domestic demand pressure; aluminium foil experienced an overall intensified contraction, with relatively stable demand for battery foil; some enterprises in the construction extrusion sector maintained stable production, but new orders were weak, and orders related to real estate had not yet recovered; in the industrial materials sector, some leading PV frame extrusion enterprises' operating rates were supported by cooperation with leading companies, but some automotive extrusion orders were only maintained until mid-June; the aluminium wire and cable sector saw an overall slowdown in shipments, with high aluminium prices suppressing downstream procurement.
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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