[SMM analysis] the opening rate of aluminum profiles was flat in April compared with the previous month, and showed a downward trend in June.

SMM has recently communicated with dozens of domestic profile enterprises, through data statistics and analysis, it is concluded that the operating rate of aluminum profile enterprises in May is 62.12%, a slight increase of 0.04% compared with April, the basic trend can be seen as follows.

Source: SMM

The total opening rate in May was basically the same as in April. However, according to the scale of enterprises, the operating rate of large enterprises is 64.55%, which is higher than that of April, and more than 10% higher than that of small and medium-sized enterprises, while the starting rate of the latter is lower than that of April. It can be seen that there are still great differences in output and order between large enterprises and small and medium-sized enterprises. Some large profile enterprises in Shandong, Guangdong and other places reported to SMM that orders in May increased steadily compared with April, and one enterprise even completed its orders in June at the end of May, and the production schedule had been scheduled for more than a month. Not only domestic trade, but also most of the large foreign trade enterprises said that orders were flat or increased compared with last year. In contrast, SMM understands that the performance of SMEs is more vulnerable. First of all, environmental protection is still the main reason affecting the growth of order production of SMEs. In addition, the problem of financial shortage is particularly prominent among SMEs this year. Because large enterprises in bank loans, social financing is easy to get more convenience and channels, and for small and medium-sized enterprises, new orders if the book period is longer, considering their own cash flow problems are often difficult to accept. In addition, some building materials enterprises said that the current real estate developers in the selection of suppliers gradually improved standards, small and medium-sized profile factories often due to the size, capacity and accounts payable and other indicators can not meet the requirements of customers and missed orders.

According to the type of enterprise, the operating rate of industrial profile enterprises is 58.94%, down nearly 4.5% from the previous month, and the average operating rate of construction profile enterprises is 62.71%, up 0.87% from the previous month. With the gradual development of construction of real estate and other site projects in May, orders for building materials increased steadily compared with April, while industrial materials suffered a marked setback. Orders for car profiles in May were significantly lower than those in April. According to SMM, orders for car profiles such as tank cars, oil tankers, passenger cars and cars all decreased in May. In addition to the weak environmental factors in the car market, the release of new regulations also affected the growth of profile orders, and orders for other industrial materials such as rail profiles, solar photovoltaic and aluminum templates were more stable.

We expect the overall operating rate of aluminum profiles to decline in June from May. Some profile enterprises said that at the end of May and early June, the number of new orders began to decrease significantly, and the production and operation situation in June may be weaker than that in May. In addition, as a result of entering the seasonal off-season of consumption in late June and catching up with the busy farming season in the north, considering seasonal and worker factors, production may be lower than that in May.