China Aluminium Rod Stocks Rise as Processing Fees Edge Up
Inventory days at Chinese rod plants climbed to 8.06 while regional processing fees rose in tandem with falling raw material costs.
In-factory inventories at Chinese aluminium rod plants reached 8.06 days of coverage as of September 11, marking a week-on-week increase of 0.43 days. The inventory ratio climbed to 102.86 per cent, signalling that supply continues to outpace demand despite minor fluctuations in restocking activity over the past five weeks.
Industry leaders in the sector saw their combined operating rate dip to 72.50 per cent, a slight decline from the previous week’s stable 72.96 per cent. This reduction in production schedules reflects subdued market sentiment and the fading pulse of downstream restocking, confirming that the oversupply condition has yet to ease significantly.
Processing fees rise in key regions
As raw aluminium prices retreated from RMB 24,460 to RMB 24,140 per tonne, processing fees in several provinces adjusted upward. Henan, Jiangsu, Hebei, and Guangdong all recorded increases of RMB 50 per tonne, driven by lower cost pressures and pre-holiday stockpiling efforts from downstream manufacturers.
Regional divergence remained evident, with Shandong holding steady at RMB 150 per tonne and Inner Mongolia dropping to RMB 75 per tonne. The low fee in Inner Mongolia persists due to ample local supply and intense competition among brands, limiting the sector's ability to raise margins uniformly across the country.
Wire and cable output shows mixed signals
The operating rate for the aluminium wire and cable industry rose to 64.6 per cent, aided by solid order performance at leading enterprises. However, smaller firms continue to face insufficient demand, indicating that the broader industry downturn has not been fully reversed despite the uptick in major player activity.
Future supply dynamics remain constrained
Market expectations suggest that high inventory levels will persist, keeping processing fee upside limited. While the restart of power grid projects and export orders in late September may boost production schedules, the fundamental supply-demand imbalance is expected to keep operating rates low in the near term.
