With the official implementation of the export tax rebate policy on December 1st, aluminum companies have largely completed their short-term order rush to take advantage of the "window period."
According to data from the General Administration of Customs, in November 2024, China exported 670,000 tons of unwrought aluminum and aluminum products, a year-on-year increase of 36.6%; and exported 190,000 tons of alumina, a year-on-year increase of 56.7%. From January to November 2024, the cumulative export of unwrought aluminum and aluminum products reached 6.16 million tons, a year-on-year increase of 18.8%, while cumulative alumina exports totaled 1.6 million tons, up 42.5% year-on-year.
In addition to the impact of the order rush, export growth this year has benefited from increased overseas infrastructure investment and a recovery in end-consumer demand. Since the second quarter of 2024, the year-on-year growth rate of aluminum-related exports from China turned from negative to positive, and has been rising steadily.
According to reports from CCTV, an aluminum foil production company in Jiangsu saw its export orders for aluminum foil packaging grow by more than 10% this year, mainly for use in the food, pharmaceutical, and other industries. The head of an aluminum formwork manufacturing company in Jiangxi also stated that orders from Southeast Asia, the Middle East, and North America have significantly increased this year, accounting for a quarter of the company's total orders. Based on the current order situation, it is expected that production will be nearly at full capacity in the second half of 2025.
However, it is important to note that aluminum products are generally used in construction, transportation, electronics, and machinery manufacturing, and can be roughly divided into architectural profiles and industrial profiles. There is an industry saying: "The world aluminum industry looks to China, China aluminum looks to Guangdong, and Guangdong aluminum looks to Foshan." For aluminum companies based in Foshan, most of them focus on architectural profiles. Many of them are currently experiencing the prolonged downturn of the construction market.
"Compared to the cancellation of the export tax rebate, the biggest challenge facing aluminum companies is still the downturn of the real estate market," said Lin Lin (a pseudonym), the head of an aluminum manufacturing company in Foshan, Guangdong, in an interview with First Financial. "This year, many large-scale aluminum manufacturers in the region have seen their performance drop by more than 20%, which is attributed to the continuous impact of the real estate downturn." Because they produced some photovoltaic profiles, their orders "held up" during the first 10 months of the year, but due to intense competition, market prices fell below cost, forcing them to give up on photovoltaic profiles, adding significant pressure to year-end performance. He admitted that the operating rate this year has been around 80%, while in previous years, they were running at full capacity. In 2022, they even expanded their production lines, but now some are left idle.
Lin Lin believes that the architectural profile sector is undergoing a reshuffling process due to severely reduced demand. "Basically, large factories can survive, and after small factories are eliminated, some of their orders will flow to the larger factories." "The situation for next year is still quite challenging."
