Chinese secondary aluminium producers operating rates estimated to slow down to 56% in May

Shanghai Metals Market anticipates the Chinese secondary aluminium producers’ operating rates to extend declines to 56 per cent in May, as aluminium purchases are expected to remain low among auto producers due to high inventories.

The upcoming stricter national emission standards which will come into effect from July 1 have already depressed sales of those cars that come with lower emission standards. This as a result has increased inventory pressure at automakers.

Moreover, lower prices of overseas ADC12 aluminium are estimated to bolster the imports in May and June, resulting in lowered consumption of domestic secondary aluminium alloy ingot. This may further drag on operating rates across secondary aluminium producers in May.

Secondary aluminium producers’ operating rates in April had averaged at 58.37 per cent, down 3.05 percentage points from 61.13 per cent in March, but up 0.05 percentage point from April 2018, learned Shanghai Metals Market.

Front-loaded orders in late March had depleted demand in April, which in turn, had affected the operating rates. Some producers had even cut production in April because of lowering offers amid sluggish consumption.