According to the latest analysis from Shanghai Metals Market (SMM), the Chinese aluminum flat-rolled products sector—including aluminum plate, sheet, strip, and foil—maintained a state of weak supply-demand equilibrium throughout May 2025. Although exports in June are projected to improve, they are unlikely to compensate for the ongoing lackluster domestic consumption.
SMM’s research reveals that the average operating rate across aluminum processing segments stayed relatively low in May. Specifically:
Aluminum sheet and strip: Operating rates remained below expected levels, with some producers citing slow order intake from packaging and automotive clients.
Aluminum foil: Despite minor recovery signals in pharmaceutical and food Aluminum packaging, total production volumes remained subdued.
Aluminum alloy plate: Weakened demand from home appliance and export-driven sectors further dragged down utilization.
While export orders for June have shown signs of moderate recovery, they are largely driven by price arbitrage due to a weaker yuan. However, SMM warns that these overseas shipments cannot fully absorb the excess supply stemming from weak domestic demand.
“Even with the widening export window in June, overall supply pressure within China will likely persist,” SMM analysts stated.
High raw material costs and rising finished goods inventory continue to challenge producers. As aluminum ingot prices remain elevated, downstream buyers are adopting a cautious procurement strategy—limiting their orders and only restocking on an as-needed basis.
Looking forward, SMM notes that government policies, including possible infrastructure investments and energy transition incentives, may provide a demand boost in Q3. However, in the near term, the imbalance between sluggish domestic demand and modest export support means that the aluminum plate and foil industry will continue to operate under pressure.
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