Aluminium billet processing fees drop in Guangdong to balance rising aluminium prices

The charge in SHFE aluminium prices have caused a dramatic drop in aluminium billet processing fees (including tax, self-pickup) in Guangdong recently and are even offered flat with or lower than aluminium ingot prices.

According to SMM, the drop has been attributed to a chain of developments. Due to rise in SHFE aluminium, aluminium billet prices have currently increased in all the markets which are not acceptable to aluminium buyers. Secondly, according to recent statistics, aluminium billet stocks at public and private warehouses in Guangdong have exceeded 200,000 tonnes due to slow demand.  Because of the off-season, orders have fallen sharply at local aluminium extrusion producers, causing a fall in aluminium billet demand. The billet processing fees have been dropped to encourage buyers.

In another update, five companies in Henan Province, who have idled aluminium capacity are seeking to sell the corresponding aluminium capacity under swap quotas, as said by the provincial government’s official website on August 10. The total idled capacity of these five companies stands at 207,000 tonnes. Till the time the demand situation is not improved and the surplus stock is brought into control, the market is expected to stay volatile.