Declined operating rate across aluminium extrusion manufacturers in June to continue this month

On the face of a sharp decline in demand in the industrial extrusion sector owing to Beijing’s curb on solar power capacity growth and subsidy cuts, operating rate across 30 Chinese aluminium extrusion manufacturers shrank in June, according to Shanghai Metals Market.

As per the data found by SMM research, the manufacturers operated at 62.44 per cent in June, with industrial extrusion sector down 13.45 percentage points to 50.25 per cent. Construction extrusion manufacturers, on the other hand, operated at 63.69 per cent, registering a small change in compare to May.

The operating rate of large-scale manufacturers recorded at 68.69 per cent in June, while that of the medium-scale manufacturers and small-scale manufacturers came in at 58.16 per cent and 27.16 per cent, respectively.

As said earlier, this shrink in operating rate had been primarily due to the weaker demand in the industrial extrusion sector, which is likely to lower further with the Chinese government’s decision to curb solar power capacity growth and cut subsidies early this month. Moreover, the US sweeping tariffs on solar panel imports resulted in restricted solar panel export from China, lowering the production and thus, the demand for aluminium extrusion, as a result. Last year, China exported solar products of 9.46 GW and 6.7 GW to India and the US, respectively.

In addition, there had been a limited growth in extrusion consumption in the sectors of bike share, special vehicle, and automobile. Extrusions for automated assembly lines in the manufacturing industry performed no better as enterprises showed reluctance in building new capacity on cash woes.

Meanwhile, operating rate in the construction extrusion sector remained stable amid a peak season for building materials and is expected to continue the same throughout this year, according to SMM. But the overall operating rate across the aluminium extrusion manufacturers is estimated to decline further by some 60 per cent in July due to the suppressed downstream consumers buying interest.