China’s aluminium processing industry sees a growth in September with PMI rebounding to 51.1

According to Shanghai Metals Market report, the last month (September) in China recorded an expansion in aluminium processing industry, bolstered by improvement in primary alloy, secondary alloy, foil, plate/sheet and strip, and construction extrusions sectors.

The purchasing manager’s index (PMI) across seven sectors in China’s aluminium processing industry rebounded to 51.1 in September, which indicated an expansion; while in August, the PMI was comparatively lower at 49.6, indicating a contraction.

A production sub-index, viewed as a proxy for operating rates, also increased to 51.3 in September from 50.5 in August but a new orders sub-index fell to 47.4 from 49.5. New export orders, however, saw a growth this month, with the sub-index climbing to 51.4 from 37 a month ago.

The plate/sheet and strip sector in September, although recorded a growth from 46.7 in August, remained in contraction territory at 48.9. Orders were sluggish across this sector, but export orders for packaging, bottle caps, heat transfer materials, and heavy and medium plates improved.

The construction extrusion sector displayed no exception either with its September PMI hovering at 48.5, compared to 47.4 in August. Orders that large producers received held steady while small and medium-sized ones saw declines in production and sales. Tight cash flows jeopardised demand from property. Demand shrinkage was also seen in the countryside and shanty town redevelopment.

Foil producers continued operating at high levels in September with the PMI across the sector jumping to 56.1 from 43.9 in August.

Orders from industrial extrusion sector saw a sharp decline in September with the PMI flipping into contraction territory, from 57.4 to 48.2. Orders for rail extrusion were moderate while those for vehicle extrusions failed to continue their improvement.

Activity in the cable wire sector also failed to continue its strong performance and shrank in September. The PMI at this sector came in at 48.6, sharply down from 62.4 in August. While September is a traditional high season, the sub-index on production stood at only 49.7 as orders at some producers dwindled. Export orders to the US shrank because of Trump’s new tariffs on $200 billion worth of Chinese goods while orders to other countries grew as export rebates on aluminium strand were raised up to 16 per cent from 13 per cent.

Some primary aluminium alloy producers saw increases in their production and sales in September with the PMI inching up to 58.8 from 57.7. But actual demand didn’t grow and backlog orders decreased.

PMI for the secondary aluminium alloy sector, on the other hand, saw a sweeping growth right from 44.9 in August to 71.9 in September, as orders improved after downstream consumers recovered their operation from summer break.