Poor demand weakens September’s secondary aluminium operating rates in China

According to the report from Shanghai Metals Market, poor consumption in the downstream automobile sector eroded operating rates across Chinese secondary aluminium plants year-on-year in September, even as the traditional high season set in.

Shanghai Metals Market found operating rates across secondary aluminium producers averaged at 58.25 per cent last month, down 5.05 percentage points from the same period last year. Compared to August, it dropped 5.13 percentage points in September.

Working days picked up from August across downstream die-casting plants as they ended summer breaks in September. This accounted for month-on-month increase in operating rate. However, actual demand failed to rebound on the year, with few downstream plants restocking before the National Day holiday and the Mid-Autumn festival.

SMM expects the operating rate to continue to decline in October to around 58 per cent, as post-holiday purchases remained thin across downstream sectors. During the National Day holiday, die-casting plants took longer breaks than last year. Some secondary aluminium producers plan to conduct maintenance in October, and this will also weigh on the operating rate.