Operating Rates at Chinese Aluminum Extruders may fall in June

Shanghai Metals Market foresees that the operating rates at Chinese Aluminium Extruders will fall slightly during the month of June. This decline has resulted from the requirements of higher environmental protection, tightening liquidity, shortage of labor and the beginning of a low-demand season, SMM’s analysis says.

Apart from the east China and Guangdong province, Shandong’s provincial government has also imposed high environmental protection standards on the local aluminium extruders. Due to such strict inspections of environment protection, a few producers are increasingly buying more aluminium rod and also have halted use of melting as well as casting furnaces that are major pollution source during aluminium extrusion production.

Aluminium producers are even plagued by less cash flow as a result of payment delay by property developers and also credit limits by the banks. Even few extruders are promising finishing goods as collaterals in order to secure loans from the banks. Shortage of labor during summer months as well as coming of low-demand season will even bring down the production at the domestic extruders in the month of June.