SHANGHAI, Aug 31 (SMM) — Operating rates across major aluminium processors dipped 0.1 percentage point on a weekly basis to 77.2% last week, but are likely to rebound slightly this week. Aluminium foil demand remains in the peak season, while demand for aluminium extrusion, plate/sheet, strip and aluminium alloy ingots has showed signs of mild recovery. However, export exports did not improve significantly. Lower supply of imported aluminium scrap and aluminium alloy ingots fueled bullish sentiment among secondary casting aluminium alloy producers. Some aluminium billet producers that use re-melted aluminium scrap as raw materials were closed.
Aluminium plate/sheet and strip: Demand for construction decorative plate and strip remained stable. Orders for can stock and tab stock weakened slightly, but were sufficient for production throughout August. Demand for automotive sheet gradually improved. Export orders remained weak.
Aluminium foil: Sufficient backlog orders for air-conditioner foil and heavy-gauge foil kept production stable, but new orders began to fall. Orders for light-gauge soft packaging foil remained ample. Orders for electronics foil and battery foil gradually recovered. Export orders did not increase notably.
Aluminium wire and cable: Slower construction under high temperatures prompted State Grid to slow down taking deliveries, which in turn pushed up finished product inventories at wire aluminium wire and cable producers. As tenders for aluminium stranded wire from State Grid remained limited, wire and cable producers continued to process backlog orders and are concerned about future orders.
Aluminium extrusion: Orders on hand at large producers could sustain production for a month, while orders at small and medium-scale producers showed signs of improving. Exports rose significantly in July when compared to June, but continued to decline on a yearly basis. Exports accounted for just a small share of total consumption. Producers kept raw material stocks at normal levels and expect consumption in September to improve from August.
Primary aluminium alloy: Several large wheel plants closed for maintenance for a week, but will return to normal production in September. Both primary aluminium alloy and wheel plants are optimistic over demand in September as September-October is the traditional peak season. As overseas demand for aluminium wheels is also recovering, oversupply of primary aluminium alloy is likely to ease.
Secondary aluminium alloy: As there are no signs of aluminium scrap import restrictions being loosened for the foreseeable future and high overseas prices have kept the import window of aluminium alloy ingots closed, secondary aluminium producers that rely heavily on imported scrap are increasingly concerned about raw material supply. Supply of aluminium scrap tense (Al<98%) tightened in coastal areas. Sluggish orders at small and medium-scale aluminium extrusion producers kept demand weak for aluminium billets made with re-melted aluminium scrap. Secondary aluminium producers reported increasing inquiries from die-castings plants, but this does not indicate significant improvement of downstream demand. Operating rates are expected to remain stable this week.
