After the Chinese New Year holiday, the domestic aluminum market entered the traditional resumption cycle, but the problem of aluminum ingot inventory buildup became prominent. Warehouses in major consumption areas faced comprehensive capacity constraints, and congestion at railway stations was widespread. Overall inventory pressure is expected to persist until the end of March...

Cui Dongshu, Secretary General of the China Passenger Car Association, stated that the national passenger vehicle industry inventory reached 3.57 million units at the end of January, fluctuating at highs—down 80,000 units MoM, but up 580,000 units YoY. Based on the month-end inventory level in January and projected future sales, the current inventory can support approximately 70 days of future sales. Compared with previous years, the figure was 65 days in January 2023, 70 days in January 2024, and 48 days in January 2025, indicating relatively high inventory pressure in January this year.

Before and after the Chinese New Year, the domestic spot aluminum market exhibited significant regional differentiation, with the spot price spread between South China (Foshan) and East China (Wuxi) drawing particular attention. Before the holiday, the Guangdong-Shanghai price spread reached a high of 150 yuan/mt on February 10, while by February 27 after the holiday, this spread had narrowed significantly to 10 yuan/mt.....

According to SMM, as of February 27, 2026, the days of inventories for domestic aluminum rod plants were recorded at 12.7 days, an increase of 8.6 days from before the holiday.In the first week after the holiday, the weekly operating rate of the domestic aluminum wire and cable industry rebounded to 57%, up 4 percentage points MoM, significantly higher than the pre-holiday low of 53%.

SMM, February 28 news： In February 2026, China's secondary lead market was squeezed by three factors—the holiday effect, high costs, and weak demand—leading to a significant pullback in production as expected, with industry operations characterized by "weak supply and demand and profit margins under pressure." Data showed that secondary lead production in February 2026 fell as expected by 140,000 mt, plunging 40.38% MoM and dropping 2.19% YoY; secondary refined lead output decreased 45.18% MoM and declined 11.36% YoY. In terms of the causes of production cuts, the primary factors were fewer calendar days in the month combined with the impact of the Chinese New Year holiday, which led to widespread shutdowns or production cuts at mainstream secondary lead smelters across the country. Worker departures for the holiday pushed operating rates to low levels, with particularly sharp declines in core production areas such as Jiangsu and Henan due to delayed worker returns and logistics constraints. Pressure on the cost side further exacerbated the scale of production cuts: before the holiday, scrap battery prices remained high due to recyclers' reluctance to sell, pushing up secondary lead smelting costs, while lead prices continued to trend weakly during the same period, causing widespread losses among secondary lead enterprises. Theoretical comprehensive profit/loss margins for large-scale producers were in negative territory, with small and medium-sized enterprises facing even more severe losses. Weakness on the demand side created a dual suppression: downstream battery producers entered the holiday early, causing lead ingot purchase willingness to hit rock bottom, while smelters' finished product inventories continued to accumulate, further dampening production enthusiasm among enterprises and ultimately leading to a sharp contraction in secondary lead output in February. Looking ahead to March, China's secondary lead market is expected to see a clear corrective rebound, with production forecast to increase by about 70,000 mt compared to February. The core driver of this trend is the comprehensive resumption of work and production across the industry chain after the holiday. With workers returning in concentration after the Lantern Festival, secondary lead smelters will enter a period of concentrated production resumptions, and some enterprises have indicated that they can resume operating at full capacity by mid-March. Gradual recovery in downstream demand will provide solid support for the production rebound: battery producers are resuming work successively, pre-holiday accumulated lead ingot inventories are entering a digestion cycle, and purchase willingness is expected to continue improving. Meanwhile, some secondary lead enterprises need to ramp up production to fulfill long-term contract delivery obligations, further driving up operating rates. On the raw material side, the scrap battery recycling market is gradually recovering after the holiday, and smelters' raw material inventories are expected to be replenished, easing supply constraints. Although enterprises still face certain profit pressures, with the combined effects of demand recovery, order support, and inventory digestion, production enthusiasm in the secondary lead industry is expected to improve significantly. Output in March is likely to achieve a substantive rebound, and industry operations will gradually return to normal.

According to SMM survey, as of February 26, social inventory of aluminum billets in mainstream domestic consumption areas reached 398,000 mt, approaching the 400,000 mt mark.

[SMM Aluminum Price Weekly Review: Global Macro Presents a Weak Balance and High Fluctuations Pattern, Continuous Inventory Pressure Limits Aluminum Price Upside Room]

[SMM Survey on Operating Rate of Steel Mills Using Externally Purchased Billets] According to an SMM survey, as of February 28, the operating rate of steel mills using externally purchased billets that mainly produce construction materials was 0%, down 24.49 percentage points MoM from the January operating rate and down 16.21 percentage points YoY.

Overall, cost support remains, but has not yet formed strong upward momentum, combined with aluminum enterprises' strong push for lower prices, aluminum fluoride prices in March are expected to be mainly stable with a slight weakening trend.

SMM February 28 News: According to SMM estimates, the monthly cast ingot volume of aluminum in February increased by around 170,000 mt MoM, largely in line with expectations at the beginning of the month. Entering March, aluminum smelters have varying plans for the local conversion of liquid aluminum. Due to high prices and high finished product inventories of processed materials, some enterprises indicated that the rebound in the proportion of liquid aluminum would be relatively limited; meanwhile, the cast ingot volume of some companies is expected to return to normal levels. Overall, the national proportion of liquid aluminum in March is expected to rebound by 9.1 percentage points compared with February and also increase from January; the total cast ingot volume in March is projected to remain above 1 million mt, which will continue to push up aluminum ingot inventory. The specific inventory situation is as follows: Social inventory: As of the first working day after the holiday, the national aluminum social inventory was recorded at 1.108 million mt, largely consistent with pre-holiday inventory forecasts; over the two working days after the holiday, aluminum ingot social inventory accumulated by nearly 50,000 mt, with the buildup level matching expectations. Finished product inventories at aluminum plants: By the end of February, according to SMM estimates, finished aluminum ingot inventories at aluminum plants had accumulated by 72,500 mt compared with the end of January, and are expected to be gradually sold externally or shipped to social warehouses. In summary, with cast ingot volumes remaining high in March, demand recovery still requiring time, and finished aluminum ingot inventories from aluminum plants being gradually dispatched—along with piled-up inventory at stations continuously entering warehouses—the post-holiday inventory peak is still projected to reach around 1.35–1.4 million mt.