According to the Shanghai Metals Market data, the average operating rate across aluminium processors in China grew by 1.3 percentage points week-on-week to stand at 58.6 per cent last week ended Friday, May 13, driven by the resumption of operations after the Labour Day Holiday. But compared to the week prior to the Labour Day holiday, the aluminium processors operating rate recorded a downfall of 6 percentage points.

Due to the hard-hit on domestic automobile manufacturing industry caused by the COVID-19 pandemic, the demand for automotive alloy and industrial extrusion has fallen short of expectations but likely to recover driving the production across aluminium processing enterprises with operation resumption across auto makers in Jiangsu, Zhejiang, and Shanghai.

The average operating rate of large primary aluminium alloy enterprises displayed a stable figure of 60 percent amid volatile aluminium prices and backlog of finished products. If the pandemic continues to improve, the recovery of downstream demand will drive up the operating rates of enterprises.

Operating rate of large aluminium wire and cable companies gained 1.4 percentage points week-on-week to stand at 55.4 per cent last week. Aluminium price rally and delivery of orders encouraged producers to boost production. Going ahead, the recovery of traffic and sufficient orders for deliveries in May-June are more likely to increase production.

The average operating rate of large aluminium extruders registered a rise of 6 percentage points to 62.5 percent. Production returned to normal even amid the affected downstream demand and logistics due to pandemic. On the other hand, the operating rate of large aluminium foil enterprises remained flat at 79.3 per cent as volatile aluminium prices turned end users more cautious about placing orders. However, the estimated robust demand for packaging foil and other products in the future gives hope to the foil companies to have an improve operating rates in the short term.

Large secondary aluminium alloy enterprises rose 5.6 percentage points to 48.8 per cent last week, with the recovery in production post the pandemic and the Labour Day Holiday.

Source:AlCircle