
China’s aluminium extrusion producers operating rates increased marginally month-on-month to 63.10 per cent in November 2020, while operating rates at industrial extrusion producers grew 2.98 percentage points to 69.68 per cent but fell at construction extrusion producers slightly to 61.84 per cent.

At large aluminium extrusion producers, operating rates increased slightly due to moderate orders, while at smaller producers, operating rates weakened due to depressed cash flows and lower orders. Operating rates and demand for aluminium extrusion were lower than those in south China. In Henan and Shandong, many aluminium extrusion producers reduced output by about 50 per cent due to environmental restrictions, while some even halted.
Operating rates at industrial extrusion increased with the rise in demand and orders for industrial extrusion from automobiles and PV sectors in H2 2020. Electronic demand and rail transport demand also performed well. The growth of construction extrusion was limited on the other hand in Q4, mainly in real estate and infrastructure sectors.
Nonetheless, the overall consumption demand in domestic aluminium sector is likely to rise in the short term. In October, China exported 77,300 tonnes of aluminium extrusion bringing the total export in 10 months to 714,600 tonnes, down 17.48 per cent year-on-year amid weaker overseas demand.
Raw material inventory/output ratio rose 0.18 per cent to 16.51 per cent compared with October. Spot aluminium rose sharply with an increase of RMB 1,940 per tonne in November. The finished product inventory/output ratio dipped to 27.5 per cent as most producers kept inventories stable.
Most of the large aluminium extrusion producers expanded capacity, while smaller producers lowered orders. Better demand in industrial extrusion segment supported the operating rates in the second half of 2020. Operating rates at aluminium extrusion producers are likely to increase to 64 per cent in December 2020.
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