Operating Rates at A356 Alloy Producers Rise 6.9% in February

SHANGHAI, Mar. 2 (SMM) -- According to a recent SMM survey, 14 domestic alloy producers produced a total of 92,700 mt of A356 alloy during February, up 8,700 mt from January. The average operating rate at these 14 producers was 73.0% in February, up 6.9% from January.

In contrast to other aluminum processing sectors, consumption of wheel is bullish, attracting primary aluminum producers to increase production of A356 alloy. Market buying of A356 alloy did not grow noticeably, but A356 alloy supply increased significantly in February, leading to a market supply surplus and causing some alloy producers to expand market shares through dumping and cutting processing fees. SMM sources report that the processing fee of A356 fell to near RMB 500/mt in February.

Wheel manufacturers took a longer Chinese New Year holiday period in 2012. At present, large wheel manufacturers say their orders are bullish, but SMEs report weak orders. No large-scale production expansion is reported at wheel manufacturers since automobile production is expected to grow slower in 2012.