Aluminium operating rates in China improved by 0.2 percentage point last week owing to new alloy capacity : SMM

According to the Shanghai Metals Market, operating rates across major aluminium processors last week increased by 0.2 per cent point to 77.3 per cent, attributing to the commissioning of new capacity at primary aluminium alloy producers.

Demand for aluminium foil remained strong, while orders at small and medium-scale extrusion producers and plate and strip sectors emerged weak. Worsening COVID-19 pandemic across the world kept processors concerned about the recovery of export orders in September. On the other hand, with import window of aluminium alloy ingots being closed, secondary aluminium producers were increasingly optimistic over the upcoming peak season during September and October. Small and medium-scale extrusion producers also showed interest in producing aluminium billets with re-melted aluminium scrap due to weak orders.

Nonetheless, some backlog orders for construction decorative plates and strips and for can stocks and tab stocks have been keeping the operating rates stable. A listed firm in Henan produced over 400,000 tonnes of aluminium plate/sheet and strip in H1, but was concerned about the market outlook in H2.

Owing to the commissioning of new capacities, operating rates at aluminium alloy producers boosted in August so far. Producers expect orders from carmakers to increase in September. Processing fees of A356.2 primary aluminium alloy in Wuxi remained stable between RMB 650-750 per tonne for self-pick up.