China’s secondary aluminium operating rates in March rebound to 47.32%: SMM

According to Shanghai Metals Market, China’s secondary aluminium operating rates in March rebounded 29.2 percentage points from February to come in at 47.32 per cent. But when compared to the same period last year, the operating rates stood 16.37 percentage points lower, learned SMM.

Resumption of large and medium scale producers was the major drive behind the rise in operating rates, while small companies grappled with the shortage of aluminium scrap supply and recovered at a slower pace. SMM survey also showed the overall sales of secondary aluminium in March were 70-80 per cent of the level during the same period last year.

Large amounts of backlogged orders and stockpiles since the Chinese New Year holiday primarily supported operations of secondary aluminium plants in March.

However, in April, SMM estimates a dip in the secondary aluminium operating rates to around 45 per cent on the further shortage of scrap and weaker demand due to the global COVID19 pandemic. Demand has slowed down in China as well as outside due to the escalation of the COVID19 outbreak throughout the world, resulting in a drop in exports and uncertainties around the macroeconomic development.

Besides, holding back cargoes from the market by aluminium scrap recyclers due to steep declines in prices is also contributing to the supply shortage, and therefore, affecting the operating rates. Supply disruptions of seaborne scrap are further intensifying the supply woes, compelling some medium and small companies to halt productions in April.