[SMM Weekly Survey of the Aluminum Downstream Sector: Downstream Aluminum Operating Rate Continued to Rebound to 61.9%, with High Prices Suppressing the Peak "Golden March" Season] This week, the weekly operating rate of leading downstream aluminum processing enterprises in China rose 2.4 percentage points MoM to 61.9%, overall extending the post-holiday recovery trend, with all segments rebounding MoM, and the industry as a whole entering a normal production pace.

This week, the ± 800 kV UHV project of Mengdian to Su (Sui Ning section) began its preliminary work. At the same time, the environmental impact assessment pre-publicity of Hexi-Zhejiang ± 800 kV UHV DC auxiliary thermal power 750 kV transmission project was announced. The project includes the expansion of the 750 kV substation in Weibao North, the 750kV transmission from Jinchang Power Plant in Gansu Province, and the 750 KV transmission from Hongshagang (Weibao) Power Plant in Gansuo Province. The total length of the newly built transmission lines is about 149.6 km, and the construction period is from June 2026 to April 2027.

[SMM Weekly Survey on Aluminum Downstream: Operating Rate of Aluminum Processing Industry Remains Flat WoW at 61.4%, Mid-Year Consumption Promotions Expected to Support Operating Rates] This week, the operating rate of leading enterprises in China's aluminum processing downstream sector remained flat WoW at 61.4%, with continued divergence across different segments.

Against the backdrop of the construction of a new-type power system, in order to effectively support the construction of large-scale wind and PV power bases in deserts, gobi deserts, and wastelands, and to facilitate and promote the intensive development and long-distance transmission of large-scale power supply bases, the construction of ultra-high voltage (UHV) projects is expected to continue advancing. The State Grid Corporation of China recently issued a tender announcement for the centralized procurement of steel towers for the 15th batch of UHV projects in 2025, with a total steel tower scale of 568,000 mt and conductor rail devices totaling 631,000 meters. The hot-dip galvanizing process, a core anti-corrosion technology for transmission steel towers, is expected to drive an increase in zinc ingot consumption, attracting significant attention within the zinc industry chain.

According to SMM statistics, the comprehensive operating rate of the domestic aluminum wire and cable industry reached 52.89% in March 2025, up 5.62% MoM from February and up 0.48% YoY from February last year, maintaining a stable performance. By enterprise size, the operating rate of large enterprises increased by 12.16% MoM to 68.91%, medium-sized enterprises rose by 1.13% MoM to 45.71%, and small enterprises improved by 2.54% MoM to 26.27%. The current rebound in operating rates is mainly attributed to the significant recovery in the operating rates of leading enterprises, with large enterprises recording an operating rate of 68.91%, up 12.16% MoM, showing a remarkable performance, while small and medium-sized enterprises are in a phase of mild recovery.

【Galvanizing Operating Rate in Q1 Slightly Weaker Than the Same Period Last Year, How Will the Market Perform in the Future?】As Q1 of 2025 is about to end, during the Chinese New Year holiday, galvanizing enterprises gradually entered the holiday and maintenance rhythm from early January. At the same time, due to the cold weather, most construction projects also gradually entered the holiday rhythm, and demand began to pull back. After the holiday, large factories resumed operations first, while small factories gradually resumed operations around the Lantern Festival. The progress of project construction resumption was slow, and demand slowly climbed. In February, infrastructure investment increased slightly YoY, with most enterprises fulfilling pre-holiday orders. The operating rate of galvanizing slowly rose, but compared to the same period last year, it was relatively weak. By March, there was no significant "Golden March" peak season as seen in previous years. Will demand improve in Q2?

March 2, 2025— After the Chinese New Year, the aluminum wire and cable industry resumed production at a steady pace. This week, the operating rate of leading enterprises reached 53%, up 2 percentage points MoM, primarily due to the orderly resumption of work as planned. However, compared to the 60% operating rate in the same period of 2024, the current rate still reflects a YoY decline of 7 percentage points. The weaker recovery in capacity compared to last year is mainly constrained by two factors: first, the industry's delivery peak has not yet arrived; second, the total volume of pending orders for enterprises is lower than the same period in 2024, directly impacting the momentum of operations.

[How Will Ultra-High Voltage Investment Continue to Contribute to Zinc Consumption in 2025?] In 2024, the headquarters of the State Grid Corporation of China is expected to conduct ultra-high voltage project procurement in 26 batches, including 8 batches of equipment procurement, 6 batches of material procurement, and 12 batches of service procurement. By the end of 2024, ultra-high voltage equipment procurement will have reached a cumulative total of 27.16 billion yuan...

February 15, 2025— The State Grid released over 200,000 mt of aluminum wire and cable orders at the beginning of 2025, including 130,000 mt from ultra-high voltage (UHV) projects and 80,000 mt from power transmission and transformation projects, injecting a strong boost into the industry chain. SMM believes that the current order structure is reshaping the industry cycle: the short-cycle, fast delivery of power transmission and transformation projects (production preparation in April, delivery in May-June) and the long-cycle, stable demand of UHV projects (continuous release starting in August) form a momentum relay. Considering that the State Grid's bidding process started 2-3 months earlier than in previous years, a new round of order releases is expected by the end of Q2. Coupled with the implementation of the 650 billion annual investment target, the aluminum wire and cable industry is likely to emerge from the "order gap period" and achieve a systemic rebound in capacity utilisation rate in H2.

February 15, 2025— The State Grid released over 200,000 mt of aluminum wire and cable orders at the beginning of 2025, including 130,000 mt from ultra-high voltage (UHV) projects and 80,000 mt from power transmission and transformation projects, injecting a strong boost into the industry chain. SMM believes that the current order structure is reshaping the industry cycle: the short-cycle, fast delivery of power transmission and transformation projects (production preparation in April, delivery in May-June) and the long-cycle, stable demand of UHV projects (continuous release starting in August) form a momentum relay. Considering that the State Grid's tendering process started 2-3 months earlier than in previous years, a new round of order releases is expected by the end of Q2. Coupled with the implementation of the 650 billion annual investment target, the aluminum wire and cable industry is likely to emerge from the "order gap period" and achieve a systemic rebound in capacity utilisation rate in H2.