China’s comprehensive Purchasing Managers’ Index (PMI) for the aluminium processing industry witnessed an increase of 1.8 percentage point month-on-month, yet stood below the 50 per cent mark during August 2024, owing to the persistent traditional off-season in the domestic market.
According to the Shanghai Metals Market survey, China’s PMI for the domestic aluminium processing industry was recorded at 43.6 per cent, with a few sectors standing as an exception above the 50 per cent mark. While the PMIs for China’s domestic construction aluminium extrusion and plate/sheet, strip and foil segment were below the 50 mark, the industrial extrusion segment and aluminium wire and cable sector witnessed PMIs of 51.97 per cent and 50.5 per cent.
Although certain sectors recovered from the traditional off-season but not enough to offset the decline in the construction aluminium and aluminium plate/sheet, strip and foil industry, with the production index at 36.2 per cent, attributed to fewer new orders for aluminium foil products and vigilance followed by construction material companies about accepting new orders due to payment security issues. The new orders index was also below the 50 mark, at 40.1 per cent.
The Purchasing Managers Index for industrial aluminium extrusion in August 2024 was 51.97 per cent, backed by orders for automotive extrusion for 3C extrusion, leading to the production index at 58.91 per cent. In September, the production schedule for PV modules is expected to rise slightly, supporting suppliers’ operating rates, leading new orders index to 51.44 per cent.
The comprehensive PMI index for aluminium wire and cable industry in August also remained above 50 mark, standing at 50.5 per cent. New orders for Southern Grid and transmission and transformation projects buoyed the PMI for aluminium wire and cable, driving the new orders index to 52.47 per cent. The purchasing volume index was 55.85 per cent, remaining in the expansion territory.
The PMI for primary aluminium alloy was at 50.7 per cent, up 6.6 percentage point M-o-M. While most alloy enterprises maintain the same production pace, some increased production to consume liquid aluminum. The order volume was on the downside for the traditional off-season and unenthusiastic purchasing sentiment among downstream manufacturers.
Aluminium plate/sheet and strip industry’s PMI was 38.5 per cent, down 0.6 points M-o-M, owing to the sluggish demand through most of the month. The PMI for the aluminium foil industry was 33.9 per cent, despite a month-on-month increase of 3.1 points. Demands for various aluminium foil products remained weak too, with no signs of improvement. Orders for food packaging foil continued to decrease, while air-conditioner foil and battery foil’s orders remained relatively stable. However, with the arrival of the consumption peak season in September, demand for aluminium foil products is likely to rise supporting the industry PMI recovering above the 50 mark.
The PMIs for construction aluminium extrusion and secondary aluminium industry were at 45.95 per cent and 47.5 per cent, attributed to stronger off-season, with production index low at 34.65 per cent for the construction extrusion sector. Secondary aluminium companies relatively maintained stable production, with 17 per cent of enterprises reporting increased operating rates.
All in all, the PMI for the aluminium processing industry was below the threshold in August 2024. For September, the outlook is positive for the aluminium plate/sheet and strip, aluminium foil, primary aluminium alloy, and secondary aluminium industries due to the seasonal peak season, with continued growth trend in export orders. The overall domestic aluminium processing industry PMI is expected to run above the 50 mark, with an anticipated exception in the industrial extrusion sector.
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