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New Growth Point for China Aluminum Processing Industry in 2012
Mar 26,2012 17:08CST
smm insight
Source:SMM
SMM’s aluminum analyst said on the 7th China Copper & Aluminum Summit that there is still new growth point for China’s aluminum processing industry in 2012.

SHANGHAI, Mar. 26 (SMM) -- SMM’s aluminum analyst said on the 7th China Copper & Aluminum Summit that there is still new growth point for China’s aluminum processing industry in 2012 under the context of product structure adjustment.

China’s aluminum processing industry develops slower currently. Operating rates at aluminum extrusion producers remained around 70% in 1H 2011 due to strong domestic and overseas demand, while operating rates at aluminum plate, sheet, strip and foil producers were near 80%. Operating rates at aluminum plate, sheet and strip producers dipped to as low as 53% in 2H 2011 due to weakening domestic and overseas demand. Aluminum processors holding high finished product inventories cut processing fees consecutively, with intense price competition spreading from North China to South China and leaving aluminum processors in trouble.

China’s apparent consumption of aluminum semis posted a decline as of the end of 2011. China’s aluminum semis has become increasing dependent on export markets since 2009 amid weak domestic demand. SMM’s aluminum analyst revealed that China’s exports of aluminum semis will unlikely register a YoY growth rate of over 30% in 2012 given SHFE and LME aluminum prices trends.

SMM believes automotive aluminum extrusion industry is the major sector for China’s aluminum extrusion development in 2012 as the construction of some high-speed rail projects was suspended temporarily. Market demand for aluminum extrusion used for power grid construction improves significantly in the face of continuous national grid investment. In addition, there is a strong development potential for packaging aluminum foil sector, while aluminum can material, CTP base and other high precision aluminum products will still be in short supply in China in the short term.

In addition, although construction aluminum extrusion market weakens, demand for aluminum sheet and aluminum composite panel used for decoration is expected to improve in 2012 along with the economic growth and the improvement of living standards.

 

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