China’s aluminium semis operating rates tumbled in April despite the peak season

According to the Shanghai Metals Market data, the average operating rate of China’s aluminium plate/sheet, strip and foil producers fell in April by 1.68 percentage points month-on-month to stand at 67.69 per cent.

Large, medium, and small enterprises' operating rates were 72.88 per cent, 39.53 per cent, and 36.53 per cent, respectively.

SMM showed the operating rate of aluminium plate/sheet and strip companies were 65.83 per cent, down 1.90 percentage points M-o-M and 10.87 percentage points Y-o-Y, while the operating rate of foil producers was 74.61 per cent. 

Although April was a peak season, many aluminium plate/sheet and strip-producing companies reported lower orders compared to March. Most of the companies’ new and backlog orders decreased significantly, resulting in diminished operating rate, while some reduced operations due to poor profit. None of the products' domestic prices reflected growth in the said month and mostly ranged between US$1,000 per tonne and US$1,250 per tonne.

In addition, poor purchase interest among downstream customers also led to the domestic operation fall of the aluminium products.

Industry players foresee a further decline in operating rates during May 2023 as they believe peak season has come to an end and there is a no sign for demand improvement.

According to SMM, the average operating rate of aluminium wire and cable producers stood at 48.1 per cent in April after a 1 percentage point downfall month-on-month. However, on a year-on-year basis, the operating rate grew 6.5 percentage points.

Large enterprises reduced production in April following massive delivery, while some undertook maintenance. The construction of power grids in south-west and north-west China will boost the demand for aluminium wire and cable in the future.