Operating rate at Chinese aluminium extrusion producers continue declining in August: SMM found

Shanghai Metals Market found operating rate across 50 Chinese aluminium extrusion manufacturers extended a decline in August on sluggish demand from the construction extrusion sector.

The survey by SMM found that manufacturers in August operated at 57.3 per cent, 2.2 percentage down from the previous month. The operating rate for construction extrusion sector also fell by 2.46 percentage points from July to stand at 57.94 per cent, while that for industrial extrusion sector climbed 0.22 percentage points to 51.02 per cent.

Operating rate across large-scale manufacturers came in at 63.89 per cent, the rate across medium-sized ones stood at 52.83 per cent and that across small one up to 20.37 per cent.

Orders at construction extrusion plants also dropped down last month due to the decay in cash flow across real estate companies. However, orders began to pick up in the latter part of September on improving demand from downstream processing companies, SMM found. This brought the estimates for construction extrusion plants’ operating rate up to 59 per cent in September.

For industrial extrusion manufacturers, orders increased from downstream rail transport, automobile, and assemble line sectors in last August. Consumption from photovoltaic companies also rebounded after slid in July but remained weaker from a year ago. The operating rate across industrial extrusion plants is expected to rise as well to 55 per cent for this month, SMM learned.

Amid cash flow pressure, raw materials inventories at aluminium extrusion producers fell to 12.08% in August. Inventories of finished products were little changed, at 37.69%.