Chinese secondary aluminium producers operating rates increase for the second consecutive month in December 2020 to 62.65%

According to Shanghai Metals Market data, secondary aluminium producers operating rates in China increased slightly by 0.23 percentage point month-on-month to stand at 62.65 per cent in December 2020. This marks the second consecutive month of rising in secondary aluminium operating rates as they grew by 4.9 percentage points month-on-month in November 2020 to 62.4 per cent.

However, on a year-on-year calculation, operating rates in December fell by 3.35 percentage points.

The monthly increase in December operating rates could be attributed to strong orders from downstream automakers. Some secondary aluminium produces trimmed output in the first half of 2020 due to shortage of raw materials, but it recovered in H2 2020 as aluminium scrap prices fell along with primary aluminium prices.

The secondary aluminium industry is still facing great pressure at present, with some producers likely to cut output due to a shortage of raw materials. Demand is also likely to decline as the traditional high season of the automobile market ends and as transportation is affected by the COVID-19 pandemic.

SMM expects secondary aluminium operating rates to slide in January 2021.