According to the Shanghai Metals Market, China’s comprehensive Purchasing Manager Index (PMI) for the aluminium processing industry rebounded in September above the 50 mark since May. It recorded a month-on-month surge of 18.1 per cent, driven by the PMIs of aluminium plate/sheet and strip, aluminium foil, industrial aluminium extrusion, primary aluminium alloy, and secondary aluminium alloy.
All the sectors mentioned above registered PMIs above 60 per cent, signalling positive growth in the manufacturing and service sectors.
As per SMM’s data, China’s average PMI for the aluminium processing industry stood at 61.7 per cent, withstanding a weak PMI level in the construction aluminium extrusion sector. Demand improvement for industrial extrusion products, especially in photovoltaic and automotive sectors, drove the PMI level. Additionally, demand and production recovery of aluminium plate/sheet and strip, primary aluminium alloy, and secondary aluminium alloy pushed the PMI up.
In September, the Purchasing Manager Index for the aluminium plate/sheet and strip industry experienced an increase of 34.4 points M-o-M to 72.9 per cent. The domestic market entering the peak consumption season has reported a hike in orders and production, propelled by the urgent need for stocking in anticipation of aluminium price hike at the end of September. Even for October, the aluminium plate/sheet and strip industry expects PMI above the 50 mark, propelled by growth in orders and production.
The PMI for aluminium foil stood at 71.5 per cent, experiencing M-o-M improvement of 37.6 points due to growing new orders and production of various aluminium foil products such as air-conditioner foil, battery foil, and packaging foil. Orders from many enterprises increased during the National Day Holiday for indulging in stocking on the prediction of aluminium price upsurge.
PMI for the industrial aluminium extrusion industry expanded to 65.82 per cent in September, with production index and new orders index rising above 70 per cent due to demand recovery. However, facing cut-throat competition in processing fees for photovoltaic and automotive extrusions, many manufacturers reported less profit.
Regarding PMI for the construction extrusion, it recorded below the 50 per cent mark despite slight improvements in export orders and production. As per SMM, the PMI stood at 47.73 per cent, with production index at 43.93 per cent, new orders index at 48.6 per cent, and new export orders slightly above 50 per cent.
PMIs for primary aluminium alloy and secondary aluminium alloy stood at 63 per cent and 62.3 per cent, respectively, growing by 12.3 points and 14.8 points M-o-M. For secondary alloy PMI, downstream demand recovery played a favourable role, boosting orders and operating rates. In contrast, the primary alloy market remained slightly bearish than expected, with some companies reporting no significant changes in orders and production.
Aluminium wire and cable PMI recorded 50.1 per cent, with small and medium-sized enterprises reporting declining operating rates. The overall production index was 51.36 per cent, up 2.7 per cent M-o-M.
SMM expects PMI for the domestic aluminium processing industry to remain above 50 per cent in October as orders and production in most downstream sectors demonstrate further improvements, barring some sectors like the construction aluminium extrusion sector.
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