According to data from SMM, China’s aluminium processing industry composite PMI index for March 2025 stood at 61.6 per cent, remaining above the boom-bust line. Driven by the traditional peak season and policy tailwinds, the domestic aluminium processing industry showed structural recovery in March 2025, with PMI for most sub-sectors rebounding above the boom-bust line. However, high fluctuations in aluminium prices, export pressures, and divergent domestic demand continued to constrain the industry’s overall recovery momentum.
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The aluminium plate/sheet and foil sectors benefited from seasonal demand in automotive and battery sectors as well as the ‘old-for-new replacement’ policy, with PMI rising significantly month-on-month to 63.3 per cent and 69.3 per cent, respectively. However, India’s anti-dumping duties and weakening overseas orders cast shadows over exports. Construction aluminium profiles saw their new orders index surge above 70 per cent due to concentrated infrastructure project rollouts, while industrial aluminium profiles maintained expansion supported by demand from new energy vehicles (NEVs) and photovoltaics (PV).
Nevertheless, small and medium-sized enterprises (SMEs) faced over 50 per cent capacity idling due to technological barriers, exacerbating industry polarisation. The aluminium cable sector, driven by front-loaded ultra-high-voltage (UHV) orders, saw its production index soar to 73.05 per cent, with full recovery in operating rates expected as grid delivery phases begin. Benefiting from increased effective production days and seasonal demand, the recycled aluminium PMI surged 27.7 percentage points to 70.4 per cent, though high aluminium prices suppressed downstream procurement, exposing risks of weak recovery in primary aluminium alloys and inventory buildup in recycled aluminium.
While April’s new PV policies and peak grid delivery seasons may sustain growth in some sectors, aluminium prices exceeding RMB 21,000 per tonne could further dampen purchasing sentiment. Coupled with export pressures and overcapacity among SMEs, the industry’s overall upside potential may be constrained.
By product category:
Aluminium Plate/Sheet:
The March PMI for the aluminium plate/sheet sector was 63.3 per cent, up 8.5 percentage points month-on-month (M-o-M), staying above the boom-bust line. At the start of the traditional peak season, demand from automotive and battery sectors seasonally recovered, further boosted by the "old-for-new replacement" policy from the Two Sessions, driving an upward trend. However, weak consumption recovery momentum and declining exports limited growth. The new export orders index for March was 64.2 per cent, reflecting gradual recovery in overseas orders from their year-start lows. Meanwhile, volatile aluminium prices intensified downstream caution, with procurement limited to rigid demand. Prices exceeding RMB 21,000 per tonne could further suppress purchasing enthusiasm. Despite concerns over inventory buildup and a "weak peak season" in terminal demand, policy expectations and dual domestic/overseas demand drivers are expected to keep the April PMI above the boom-bust line.
Aluminium Foil:
The March PMI for the aluminium foil sector was 69.3 per cent, up 3.7 percentage points M-o-M, remaining above the boom-bust line. The new orders index hit 85.1 per cent as demand for air-conditioning foil and battery foil steadily recovered during the peak season, allowing leading enterprises to stabilise operations with ample orders. Although aluminium price volatility dampened downstream procurement, production remained resilient, supported by rebounding overseas orders. Macro-level policies favouring home appliances and NEV "old-for-new replacement" boosted segments like brazing foil and battery foil. However, India’s anti-dumping duties on Chinese aluminium foil may pressure exports, adding uncertainty. Short-term supply-demand dynamics remain stable, with leading enterprises demonstrating strong production resilience. The April PMI is expected to stay above the boom-bust line.
Construction Aluminium Profiles:
The March PMI for construction aluminium profiles rebounded to 57.52 per cent, staying above the boom-bust line. Per SMM research, December to February marked the traditional off-season, but March saw the production index rise to 58.53 per cent as demand recovered. Aluminium prices remained high, prompting firms to maintain minimal safety stock, with the raw material procurement index at 60.24 per cent and the inventory index dropping to 44.15 per cent. Market structure shifted toward government-led projects (e.g., high-speed rail/airports, industrial parks), lifting the new orders index to 70.84 per cent, while traditional civilian profile business shrank. Export performance diverged: despite tariff and price challenges, firms maintained sporadic exports via adjusted pricing mechanisms, with the export orders index at 49.08 per cent (contraction zone). As April’s peak season approaches, further PMI upside is anticipated.
Industrial Aluminium Profiles:
The March PMI for industrial aluminium profiles was 62.22 per cent, staying above the boom-bust line. Sub-indices showed production and new orders at 64.33 per cent and 79.64 per cent, respectively, driven by steady output growth. However, some building material firms with partial exposure to industrial profiles began strategic retrenchment by late March. These firms, with less than 30 per cent industrial profile capacity, reported high technical barriers in auto parts manufacturing, leading to concentration among top players.
While leading firms enjoy saturated orders from NEV supply chains, SMEs with weak R&D face over 50 per cent capacity idling. In PV profiles, demand for brackets and frames stayed strong. Despite low processing fees, component manufacturers’ stockpiling under new PV feed-in tariff policies kept leading firms at full production. High aluminium prices prompted need-based procurement, with the raw material procurement index at 66.58 per cent (expansion zone).
Notably, while aluminium prices remain elevated, falling processing fees and intensified competition pressure firms to destock and cut costs. Most adopt ‘produce-to-order’ strategies with minimal safety stock, keeping the raw material inventory index at 41.41 per cent. For finished goods, leading PV firms built preemptive inventory for mainstream products, lifting the index to 56.33 per cent. With auto sector capacity recovery and stable PV demand, industrial profile PMI is expected to stay above the boom-bust line in April.
Aluminium Cable:
The March PMI for aluminium cables was 59 per cent, up 6.6 per cent M-o-M, signalling expansion. As grid delivery phases approached in April, UHV and power transmission orders accelerated, driving orderly post-holiday resumption and higher capacity utilisation. The production index surged 26.05 per cent M-o-M to 73.05 per cent. New orders from grid projects like UHV transmission boosted the new orders index to 25.59 per cent. Raw material procurement rose (54.28 per cent) due to restocking needs, while finished goods inventory increased (60.56 per cent) ahead of deliveries. With April’s grid delivery peak, sector-wide operating rates are expected to recover fully, keeping PMI above the boom-bust line.
Primary Aluminium Alloys:
The March PMI for primary aluminium alloys was 57.8 per cent, down 2.2 percentage points M-o-M, indicating weak recovery. Leading firms saw gradual output increases (production index: 68.8 per cent), but momentum faded weekly. Supply normalised post-Lunar New Year, yet ample circulating supply, high factory/raw material inventories limited expansion. Weak new orders and high aluminium prices heightened downstream caution, with spot trading muted. Production growth slowed amid supply-demand imbalances, reflecting uncertain price trends. SMM expects April PMI to stay above the boom-bust line but with limited upside.
Recycled Aluminium:
In March, the PMI for the recycled aluminium industry surged by 27.7 percentage points month-on-month (M-o-M) to 70.4 per cent, rapidly crossing above the boom-bust line. On the production side, as the impact of the Lunar New Year holiday subsided, effective production days increased, and seasonal demand rebounded, recycled aluminium enterprises generally saw order volumes recover, driving higher operating rates across the sector.
However, it is noteworthy that due to order front-loading and ongoing destocking at the terminal end, the anticipated "Golden March" peak season failed to materialise, with actual downstream orders contracting significantly year-on-year. Regarding inventory, recycled aluminium plants faced mounting pressure from finished product inventory buildup due to supply-demand imbalances, while raw material stockpiles remained low as high prices constrained procurement. Looking ahead to April, if terminal demand fails to rebound as expected, the industry PMI may fall below the boom-bust line again.
Summary:
The composite PMI for China’s aluminium processing industry rebounded to 61.6 per cent in March 2025, entering expansion territory as traditional peak season effects and policy dividends converged. Most sub-sectors recovered above the boom-bust line. Aluminium plate/sheet (63.3 per cent) and foil (69.3 per cent) rode seasonal automotive/battery demand and replacement policies, though India’s anti-dumping duties and weak overseas orders weighed on exports. Construction profiles’ new orders exceeded 70 per cent, while industrial profiles expanded on NEV/PV demand, yet SME technical bottlenecks caused over 50 per cent capacity idling, highlighting polarisation.
Aluminium cables led with a 73.05 per cent production index, driven by UHV orders and grid deliveries. Recycled aluminium PMI skyrocketed 27.7 points to 70.4 per cent, but high prices stifled procurement, exposing weak recovery in primary alloys and inventory risks. Looking ahead, while April’s PV policies and grid peak may sustain growth, aluminium prices above RMB 21,000 per tonne could further suppress buying, compounded by export headwinds and SME overcapacity, narrowing the industry’s overall upside.
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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