China’s downstream aluminium companies operating rate reaches 60%, buoyed by production resumption post CNY

According to the Shanghai Metals Market, the operating rate of leading domestic aluminium downstream processing companies increased by 3.2 percentage points week-over-week to 60.2 per cent last week. However, annually, the operating rate fell by 2.8 percentage points. 

The W-o-W increase could be attributed to the recommencement of production and operations of downstream aluminium processing companies after the Chinese New Year Holiday. The secondary aluminium alloy operating rate also saw a significant rebound during the week, leading the production of large plants to pre-holiday levels. The industrial extrusion sector also resumed production but construction extrusion sector continued to remain in the traditional off-season. 

However, orders in both the secondary aluminium alloy sector and the industrial extrusion sector remained average. Only extruders in Jiangsu, Zhejiang, Shanghai, and part of South China reported slight improvement in orders.

The operating rate of the aluminium plate/sheet and strip industry also rebounded last week, albeit slightly. Further improvement is expected in March 2024. The primary aluminium alloy and aluminium foil sectors displayed relatively stable operating rates for the week. 

Primary aluminium alloy and aluminium plate/sheet & strip

The operating rate of leading primary aluminium alloy companies was 49 per cent last week, buoyed by slight demand recovery as downstream customers resumed work after the end of the Lantern Festival.

The operating rate of aluminium plate/sheet and strip companies grew 0.2 percentage points to 74.6 per cent. Going ahead, it is expected to grow in line with downstream demand recovery. 

Aluminium wire and cable and aluminium extrusion

The operating rate of leading aluminium wire and cable companies improved 2 percentage points M-o-M to stand at 60 per cent. Under the delivery pressure of UHV orders, the operating rate increased. But except for the UHV orders, demand from the State Grid is not currently very optimistic. The market is, however, looking forward to March and April as these two months in the previous year were the traditional peak seasons for consumption in the aluminium processing industry. 

The operating rate of aluminium extrusion companies was recorded at 50 per cent, up by 8 percentage points from the previous week. In terms of sectors, construction extrusion sector is still in the traditional off-season. Most of the orders are long-term received before the Chinese New Year holiday. The industrial extrusion sector’s operating rate stood relatively stable, with steady operations at photovoltaic and automotive extrusion companies.

Aluminium foil and secondary aluminium alloy

The operating rate of aluminium foil companies remained stable at 76.5 per cent, supported by improved orders for packaging foil, air conditioning foil, battery foil and other products. 

The operating rate of secondary aluminium alloy companies increased by 8.8 percentage points W-o-W, standing at 51.3 percent. After the Lantern Festival, small and medium-sized plants resumed production, contributing to the operating growth rate. As per the report, the operating rate of companies that resumed production returned to pre-holiday levels. However, the demand recovery was average, with no significant increase in new orders.