China’s secondary aluminium operating rate increased in August as downstream plants began restocking

Shanghai Metals Market found secondary aluminium producers continued to increase their operations in August as downstream plants in north China restocked in advance on worries about environmental curbs before the Nation Day on October 1.

Data shows that the operating rates in August increased to 54.46 per cent, up 1.18 percentage points from July and 3.34 percentage points from August 2018.

Consumption of secondary aluminium picked up in late-August after the seasonal lull in May-July reduced inventories of both feedstock and finished products across secondary aluminium producers.

As the latest import quotas for aluminium scrap barely shrank, ample supply of cheap overseas scrap also bolstered higher operation across secondary aluminium smelters that use seaborne materials as feedstock.

China’s aluminium scrap imports in July stood at 143,000 tonnes, up 17.9 per cent from a year ago.

SMM expects the operating rates at Chinese secondary aluminium producers to increase further in September, although at a slow pace, as the demand is anticipated to recover further.