Limited Impact on Cast Aluminum Alloy Consumption from Better September Automobile Sales

SHANGHAI, Oct. 20 (SMM) -- According to latest data from the China Association of Automobile Manufacturers (CAAM), China’s automobile production and sales were 1.60 million units and 1.65 million units during September, respectively, up 15% and 19.19% MoM, and up 0.37% and 5.52% YoY.

SMM sources report that although automobile sales improved during September, demand for cast aluminum alloy remained weak. September demand for cast aluminum alloy was slightly better than August level, which was also confirmed by operating rates at cast aluminum alloy producers in September. A recent SMM survey shows that operating rates at cast aluminum alloy producers were 65.53% during September, only up 4.93% MoM.

Automobile sector is the largest consumer of cast aluminum alloy, but cast aluminum alloy consumption remained weak despite improved automobile sales, since automobile sales grew more rapidly than automobile production in September, with auto manufacturers mainly consuming existing inventories while need not purchase large amounts of raw material for production.

Meanwhile, aluminum die-casters that mainly produce auto parts also mainly consumed existing raw material inventories, and they reduced inventories and were cautious toward purchases due to tight cash flows. In this context, time is still needed for improved automobile production and sales to be felt by cast aluminum alloy markets.