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04 JULY 2018 AL CIRCLE

Purchasing Managers’ Index for downstream aluminium sectors dips in June in China

EDITED BY : DEBANJALI SENGUPTA 2MINS READ

According to the latest survey report by Shanghai Metals Market, the purchasing managers’ index for the downstream processing industries of aluminium dipped to 46 in June from May’s 54.8. This indicates that the PMI in June stood below the 50 mark that separates expansion and contraction.

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In the background of slow season in June, June’s production index, particularly for the aluminium plate/sheet and ship industry, dipped straight from 72.7 in May to 40.9 in June, while the new order index dropped from May’s 42.2 to 29.9. This enormous drop was primarily due to orders decline for heavy, medium, and thin plates/sheets used in the petroleum and petrochemical industries, hot-rolled coils, construction-use panels, as well as aluminium plastic-composite panels. 


The PMI for aluminium foil industry, on the other hand, recorded 64 in June, inching down from 67 in May. Although the demand for pharmaceutical-use foil slowed down, consumption for beer and air-conditioner foil provided some support and is likely to sustain till July.


As far as the aluminium construction sector is concerned, the primary managers’ index for primary extrusion stood at 49.1 in June, in contrast of 54.2 in May. This can be attributed to the shut-down of small domestic smelters for rectification on environmental probes. The PMI in July is also envisioned to remain the same as that of June with support from large and medium-sized plants.


A relatively stable demand for aluminium extrusion for construction in comparison to other downstream products accounted for the major domestic aluminium consumption this year.


However, the industrial aluminium extrusion sector saw a sharp decline in orders particularly of photovoltaic aluminium extrusion weighed on the operating rates across the industry in June. The PMI fell exceedingly from 59.7 in May to 27.5.


In addition to falling orders, operating rates were further depressed by financial pressure across downstream processing producers. Moreover, this pressure shows no sign of improvement in the short term. The overall finished products inventory index, as a result, climbed up from 52.5 in May to 74.8 in June.


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EDITED BY : DEBANJALI SENGUPTA 2MINS READ

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