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26 MAY 2020 AL CIRCLE

Operating rates at China's aluminium processors remained stable last week on strong domestic demand

EDITED BY : DEBANJALI SENGUPTA 2MINS READ

Shanghai Metals Market, after surveying 41 major aluminium processors in 12 provinces revealed that the average operating rates increased 1.3 percentage points on weekly basis to 78.8 per cent last week. This growth was primarily driven by sustained strong consumption from the construction and medical sectors. Demand for aluminium foil used in air-conditioners, beverage and beer packaging was found increased too, leading to the hike in aluminium processors’ operating rates.

China’s operating rates at aluminium processors remained stable last week on strong domestic demand

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However, on the other hand, the impact from weaker export orders has emerged, according to SMM, especially for aluminium plates/sheets, resulting in lower operating rates at aluminium producers.

Operating rates of primary alloy producers remained stable at 55 per cent, whereas operating rates at aluminium wheel plants picked up slowly. In April, large alloy producers in Shandong switched production to aluminium billets, and as of now, has no plans to resume production of A356.2 aluminium alloy in the short term.

Operating rates at large aluminium wire and cable producers also remained stable due to long production schedules. But operating rates at large aluminium plate/sheet and strip producers fell 5 percentage points as export orders dropped 30-40 per cent.

Operating rates at aluminium extrusion producers remained stable too, as building renovation and infrastructure construction drove the demand for extrusion used in the doors, windows, curtain walls, and framework. Also, the demand for industrial extrusion from automobiles, home appliances, and machinery sectors recovered, boosting extrusion operating rates.

Energy Consumption in Aluminium Smelting

Operating rates at aluminium foil producers rose 2.5 percentage points to 88.5 per cent, largely driven by the rising demand for air-conditioner foil. Also, the use of foil in beverage and beer packaging increased due to improving demand in the summer months, leading to the hike in aluminium foil operating rates.

Secondary aluminium alloy producers operating rates grew 12.5 percentage points. This was mainly driven by the adjustment of production schedules rather than improving demand.

SMM expects primary aluminium to continue to replace aluminium scrap in the production of aluminium billets, given the narrowing price spread between A00 aluminium and high processing fees of aluminium billets.


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EDITED BY : DEBANJALI SENGUPTA 2MINS READ

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