Mixed trends in supply and demand! Domestic aluminium billet supply-side operating performance remained generally stable in November, with the final production figure meeting off-season expectations. As the September-October peak season concluded, some aluminium billet enterprises planned ahead to switch production to aluminium bus bars, primary alloys, aluminium rods, and other products.
Additionally, some group enterprises, due to poor overall annual performance, implemented marginal production cut adjustments in November, showing signs of supply contraction during the off-season. However, due to the stronger-than-expected performance of aluminium billet processing fees, particularly in south China, some billet plants in south-west China increased production accordingly. Coupled with some newly commissioned capacities entering the ramp-up phase in Q4, domestic aluminium billet supply achieved a temporary stable transition amid mixed trends.
The daily average production of primary aluminium billets in November pulled back slightly to around 50,000 tonnes per day m-o-m, in line with previous expectations. However, SMM expects that as the off-season deepens in December and high aluminium prices further suppress processing fees and downstream demand, enterprise inventory and capital pressures will intensify. Some enterprises already have plans for sizable production cuts, and daily average production is expected to continue pulling back to 48,000 tonnes per day.
First, looking at the final statistics for aluminium billet supply in November. According to the SMM monthly survey, the current sample for the monthly primary aluminium billet survey includes 175 enterprises, an increase of 2 from the previous month, with a total capacity of 32.2 million tonnes, an increase of nearly 300,000 tonnes m-o-m. National primary aluminium billet production in November 2025 (30 days) totalled 1.507 million tonne, down 56,000 tonne m-o-m from October 2025 (31 days), a decrease of 3.6per cent, but up 30,000 tonne y-o-y, an increase of 2.0per cent. The domestic operating rate for primary aluminium billets in November was 56.6per cent, down 2.2per cent m-o-m and down 0.2per cent y-o-y. By region, except for Henan, where production rebounded against the trend after the end of environmental protection-related controls, production in other provinces declined to varying degrees, but the overall performance remained in line with off-season expectations.
So, what are the predicted values for aluminium billet production in December? Have there been significant changes in producer inventory? According to the latest predictive survey by SMM on the production plans of domestic aluminium billet enterprises by province for December, after desensitization, SMM forecasts national primary aluminium billet production in December (31 days) to be 1.501 million tonne, down 6,000 tonne m-o-m from November 2025 (30 days), a decrease of 0.4per cent, but up 36,000 tonne y-o-y, an increase of 2.5per cent.
The operating rate is expected to decrease 0.7per cent m-o-m and 0.5per cent y-o-y to 55.9per cent. In early December, SHFE aluminium prices surged again, reaching a new annual high. Although the bull market has persisted for over half a year and downstream acceptance of high prices has increased, with year-end consumption weakening and high prices exerting pressure, aluminium billet processing fees in east China began to weaken in late November.
Some aluminium billet enterprises in north China, aiming to avoid escalating inventory and capital pressure, are expected to expand production cuts. Inner Mongolia, Qinghai, Gansu, and Shanxi are all forecast to see production declines exceeding 3per cent m-o-m in December. Regarding in-factory inventory, due to stronger-than-expected aluminium billet processing fees in November while production remained generally stable, in-factory aluminium billet inventory initially fell, then rose during the month, with an overall relatively small change. According to SMM survey statistics, domestic aluminium billet in-factory inventory in the first week of December was approximately 102,000 tonnes, down 8,000 tonnes from the same period last month. The average days of inventory decreased by 0.2 days to 2.0 days compared to the same period last month. In-factory inventory has been around the 100,000 tonne level for some time. Given persistently high aluminium prices and weak downstream consumption expectations, inventory pressure for aluminium billets in factories is expected to increase significantly in December, with a risk of inventory buildup.
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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