China’s overall aluminum processing PMI for July registered 42.2%, a sharp pullback of 4.4 percentage points MoM, with all sub-sectors in contraction territory. Aluminum plate/sheet and strip (44.8%), aluminum foil (39.0%), construction extrusion (39.7%), industrial extrusion (42.1%), aluminum wire and cable (44.4%), primary alloy (43.9%), and secondary alloy (37.6%) all fell below the 50 mark, signaling a further contraction in industry sentiment. The common pressure across sub-sectors was the full-blown traditional consumption off-season in July, with synchronized weakness in end-use demand from real estate, home appliances, and general machinery. Sub-indexes for all categories broadly fell into contraction territory. Structural divergence was pronounced—civilian sheets and plates in the plate/sheet and strip sector, air-conditioner and packaging foil, real estate extrusion orders, and domestic sales and exports in the wire and cable sector all weakened across the board. Only NEV and PV-related demand in the industrial extrusion sector provided structural support. Export performance showed a sharp contrast: aluminum plate/sheet and strip, aluminum foil, and construction extrusion exports only contracted mildly, and industrial extrusion exports held at the 50 mark, while a reversal of the price spread between Chinese and overseas markets hammered new export orders for aluminum wire and cable, making it the biggest drag. Secondary alloy, additionally constrained by fiscal and tax compliance controls and a shortage of aluminum scrap raw materials, recorded the lowest reading among all processing sub-sectors.
Looking at individual product categories:
Aluminum Plate/Sheet and Strip : The monthly composite PMI for aluminum plate/sheet and strip registered 44.8% in July, with all core sub-indexes broadly shifting into contraction territory. Both the production index and new orders index fell to 41.3%. As the traditional July off-season deepened, automotive sheet consumption pulled back slightly, 1000, 3000-series cast-rolling orders decreased notably, end-use demand for general-purpose plates remained persistently sluggish, and producers faced the dual headwinds of insufficient orders and elevated finished product inventories. The scale of proactive production cuts expanded significantly MoM. On the export front, the new export orders index registered 48.6%—still in contraction territory but with a relatively mild decline. Although customs data showed exceptionally stellar aluminum plate/sheet and strip export performance in June (354,000 mt, up 10.6% MoM and up 44% YoY), maintaining some resilience, domestic enterprises that had undertaken diverted orders saw a notable adjustment in production pace in July after North American leading rolling mills resumed production lines in June. Diverted orders that had previously flowed back to China were fully reclaimed. On the inventory and pricing front, the finished product inventory index fell to 45.0%, and the raw material inventory index was 47.6%, with enterprises adopting proactive production cuts and aggressive destocking strategies during the off-season. Overall, multiple pressures—the loss of can stock transfer orders, marginal weakening of export support, and deepening traditional off-season effects—are intertwined. The aluminum plate/sheet and strip PMI is expected to remain below the 50 mark in August.
Aluminum Foil : The monthly composite PMI for aluminum foil fell to 39.0% in July. By sub-index, the production index and new orders index both plummeted to 31.8%. The traditional off-season effect deepened July–August, downstream clients lacked incentive to stockpile, and production and sales fell 10%–20% MoM. The air-conditioner foil segment was the core drag—some producers reported that air-conditioner foil production schedules were sharply cut by 25%–30% MoM, with operating rates plunging. Exports provided a partial offset temporarily; some enterprises’ export order production schedules have been extended to September, but uncertainty around new orders for October is high after the narrowing of the price spread between Chinese and overseas markets. On inventory management, the finished product inventory index registered 48.9% and the raw material inventory index registered 30.5%. Fear of falling prices currently remains the dominant sentiment, with processors widely adopting "controlled production runs, prioritizing inventory reduction" as their primary strategy. Amid deep weakness in air-conditioner foil and off-season packaging sector effects, existing battery foil consumption support is insufficient to reverse the overall trend. Judging comprehensively, the aluminum foil industry was mired in a structural deep freeze in July. The aluminum foil PMI is expected to remain deeply depressed in August.
Construction Extrusion : The composite PMI for the construction aluminum extrusion industry registered 39.7% in July, remaining below the 50 mark. The production index registered 33.7%, the new orders index registered 32.2%, and the procurement volume index registered 39.9% this month, signaling an intensifying industry contraction. The off-season for real estate building materials deepened in July, with end-use new order volumes for construction extrusion contracting further. Small and medium-sized extrusion plants reported downstream purchases were mostly rigid demand-based rush orders, while the drift higher in aluminum prices at month-end heightened end-user cost concerns, further suppressing the pace of construction extrusion order finalization. Some small and medium-sized construction extrusion enterprises in the Hebei region began taking phased holidays due to order deficits, with industry sentiment weakening significantly MoM. The new export orders index registered 49.8% this month. Although strong growth in extrusion exports materialized in June, enterprises reported that recurring overseas geopolitical conflicts and a repair of the aluminum price spread between Chinese and overseas markets shifted export orders into a mild contraction territory in July. On the inventory side, the finished product inventory index registered 41.5% and the raw material inventory index registered 40.2%. Enterprises broadly implemented proactive destocking strategies amid sluggish off-season demand, strictly purchasing raw materials as needed. Looking ahead to August, traditional off-season pressure is expected to magnify further. Producers are cautious in their order expectations for the coming period. The composite PMI for construction extrusion is expected to remain below the 50 mark in August.
Industrial Extrusion : The composite PMI for the industrial extrusion industry registered 42.1% in July, remaining below the 50 mark, with overall industry sentiment staying in a weak contraction zone. This month’s sub-indexes show a production index of 38.5% and a new orders index of 40.0%. Sector demand exhibited a clear structural d
Source: Shanghai Metals Market
