Aluminium extruders operating rates dip 1.4 percentage points M-o-M in Dec’22 due to demand drop from real estate

In December 2022, the average operating rate of aluminium extruders recorded a month-on-month drop of 1.4 percentage points and a year-on-year decline of 14 percentage points to stand at 36.5 per cent, found the Shanghai Metals Market data. The average operating rate of large enterprises was 37.8 per cent, mid-sized companies 35.8 per cent, and small firms 20.5 per cent.

The construction aluminium extrusion sector’s operating rate dipped 1.7 percentage points from the previous month to peg at 32.6 per cent, which on a yearly basis decreased by 18.6 percentage points. The industrial aluminium extrusion sector fell 1.3 percentage points month-on-month but rose 2.2 percentage points year-on-year to come in at 52.3 per cent.

The average operating rate of aluminium extruders declined in December 2022 for season factors, coupled with the early arrival of the Chinese New Year 2023. The demand from terminal sectors led by the real estate sector in north China fell sharply, resulting in production halt at aluminium processing enterprises. The onset of unprecedented COVID wave also led to delayed orders and scarcity of staff in many aluminium extrusion processing companies. Due to that, the output and operating rates were affected, though the overall impact faded away in late December.

Meanwhile, industrial aluminium extrusion companies maintained normal operating rates, barring the fact a few of them cut production seasonally. The orders from lightweight automobiles and photovoltaic-related aluminium extrusion prospered that made many leading companies run at full capacity during the Chinese New Year holiday.

The output ratio of aluminium extruders was 26.7 per cent in December, up 7.2 percentage points from the previous year, driven by restocking demand from enterprises to take early holidays. The finished product inventory/output ratio stood at 39.4 per cent, an increase of 11.6 per cent Y-o-Y.

For January, SMM expects the average operating rate of aluminium extrusion producers to continue falling sharply as most companies will be closed for the holiday.

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