SHANGHAI, Jan. 23 (SMM) –

Soft End-User Demand Turns 1H 2013 Outlook for Aluminum Processing Gloomy
Raw material inventories at automobile, can, home appliance and electric equipment manufacturers have all fallen to record lows. Any recovery in the aluminum processing sector during 1H 2013 will depend heavily on restocking by downstream manufacturers. 

The decision to replenish stocks is dependent upon downstream orders. New orders at home appliance and electric equipment manufacturers are thin at the moment, with demand for air-conditioners especially poor. As a result, end-users are now purchasing as needed.  

60% of China’s Aluminum Extrusion producers See Orders Fall in January
SMM’s latest survey of domestic aluminum extrusion producers found 60% of the surveyed producers will see a drop in new orders this month. Another 30% will report no change in orders, while the remaining 10% will report an increase. 

Operating rates at aluminum extrusion producers have been low since Q3 due to poor orders. Operating rates at aluminum extrusion producers serving the construction sector did climb back above 60% in Q4 with an acceleration in construction projects. November’s rate was the highest in the second half of 2012. In contrast, operating rates at industrial aluminum extrusion producers remain low as high-speed railway and power grid investments slow and as the solar and auto sectors remain depressed.