
According to Shanghai Metals Market, operating rates at Chinese secondary aluminium producers averaged 54.84 per cent in January 2019, down month-on-month by 2.37 percentage points and year-on-year by 10.2 percentage points.

Poor orders from downstream aluminium sector in January was one of the reasons for this bearish sentiment across secondary aluminium plants that even drove them into production cuts. Earlier-than-usual suspension before the Chinese New Year break at medium and small-sized secondary mills also took a toll on the overall operating rate, observed Shanghai Metals Market.
SMM data shows that operating rate across domestic secondary aluminium plants may become lower in February, due to CNY closures. While large secondary mills mostly closed for seven days over CNY, most medium-sized and small producers were closed for up to 20 days.

Moreover, downstream die-casting mills are expected to take longer breaks and resume operations slower than in previous years. This may further depress production enthusiasm of secondary aluminium producers in February, found SMM.
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