According to the Shanghai Metals Market, the average operating rate at China’s major aluminium processing enterprises has slipped by 0.2 percentage point this week ending on July 8, to stand at 66.5 per cent. Aluminium wire and cable was the only sector that recorded a growth in operating rate as the companies ramped up production and deliveries, fearing restriction on transportation amid the COVID-19 outbreak in Wuxi. The average operating rate at large wire and cable companies has increased by 1.4 percentage points to 58.4 per cent.
Aluminium wire and cable companies are estimated to maintain stable production buoyed by scheduled delivery to ultra-high voltage projects, while the operating rate of other downstream sectors will continue to fall.
The operating rate in the primary and secondary aluminium alloy sectors has dropped due to the off-season and falling aluminium prices. Other downstream sectors neither saw any hikes in operating rates as poor demand and bearish price trend discouraged customers from picking up cargoes.
The average operating rate across large primary aluminium alloy enterprises has fallen by 2 percentage points to 60 per cent this week as sluggish demand led to production cut. SMM estimates the operating rate of primary aluminium alloy to decrease further, with no turnaround in sight until September, as the approaching off-season is aggravating poor new orders.
The average operating rate of large secondary aluminium alloy enterprises has inched down by 0.7 percentage point to 48.1 per cent. The prices of ADC12 secondary aluminium alloy have plummeted by RMB 600 per tonne through the week, discouraging producers escalating their output. Reduced purchase by downstream die-casting plants due to poor orders and falling prices have also contributed to the decline in secondary aluminium plants operating rates.
The operating rate at large aluminium extruders have remained flat at 70 per cent this week due to lacklustre demand. Relatively, orders for industrial extrusion were stable, outperforming those for construction extrusion.
Large aluminium plat/sheet and strip enterprises have recorded stable production, with operating rates remaining at 81 per cent, attributing to restocking by customers in Jiangsu, Anhui, Xi'an and some other regions.
Responses
