Poor orders, CNY breaks lower operating rates at secondary aluminium plants in Jan

SHANGHAI, Feb 19 (SMM) – Operating rates across Chinese secondary aluminium producers averaged 54.84% in January, down 2.37 percentage points from December and down 10.2 percentage points from January 2017, SMM data showed.

In January, poor downstream orders grew bearish sentiment across secondary aluminium plants, and drove them into production cuts. Earlier-than-usual suspension before CNY at medium-sized and small secondary mills also weighed on the overall operating rate.  

CNY closures are expected to significantly lower operating rate across domestic secondary aluminium plants in February. While large secondary mills mostly closed for seven days over CNY, most medium-sized and small producers closed for up to 20 days. 

Downstream die-casting mills are also expected to take longer breaks and resume slower than previous years, which will depress production enthusiasm of secondary aluminium producers after resumption in February.