Domestic aluminium extrusion operating rate continued to decline amid off-season

The operating rate of aluminium extruders declined to 47.94% in January. The operating rate of large enterprises increased slightly in January, mainly because CNY holidays in south China and parts of Shandong this year were slightly earlier than in previous years. In order to ensure the delivery of orders before the year, enterprises rushed to produce, and the operating rate of large enterprises in January recorded at 49.37%. The operating rate of medium-sized enterprises remained stable, recording 46.37%. The operating rate of construction extrusion dropped due to the impact of terminal demand. Industrial extrusion factories in east China received urgent orders for PV extrusions to be delivered before the year, boosting the operating rates. The operating rate of small enterprises continued to decline, recording 42.62%. According to SMM research, small enterprises will resume work later, and some companies stated that they will resume work after Feb 24.

The operating rate of construction extrusion was 43.39%, and that of industrial extrusion companies was 53.06%. Specifically, the overall off-season atmosphere for building extrusion is strong. Only a small number of companies received new orders in January, mainly purchased by schools in surrounding areas during the winter vacation for renovation. However, it also shows that these new orders are difficult to sustain. The overall building profiles are in the off-season, and the sluggish demand has not improved. In addition, it is common for construction extrusion to have difficulty in collecting payment, so companies require cash in hand or 30-50% of the payment in advance when receiving orders before CNY. In the industrial extrusion sector, component factories released their production plans for February in mid-January. Around January 20, they placed orders for frames and required extrusion to be shipped before CNY. Extrusion factories rushed to work, which boosted the operating rate. However, the purchase volume is mostly for 7-10 days of demand from component factories, and the overall demand is not large; automobile extrusion continues to have a stable and positive trend, and some leading companies have stated that they will have a 1-3 days of holiday during CNY or implement shift production to meet the needs of downstream customers.

In February, most domestic aluminium extrusion factories have suspended production. Many companies are taking advantage of the holidays to overhaul production equipment. According to the current resumption time, production time in February will be halved, and it will take some time to fully resume production. It is expected that the operating rate of aluminium extruders will weaken significantly in February.