Operating rates at Chinese Aluminum Foil Producers to Head for A Steep Drop in June

SHANGHAI, Jun. 22 (SMM) – SMM survey found that the operating rate at domestic aluminum plate/sheet and strip producers averaged 64.36% in May, basically flat with April. This is because faltering demand from one sector had little effect on the overall operating rate due to their massive use in many industries.

The operating rate at aluminum foil producers, in contrast, slid 7.34% MoM to 71.02% in May. 

Consumption of air conditioner foil entered off-season season in June, and demand for other foil such as light gauge foil and container foil failed to offset the sharp decline in demand for air conditioner foil. Hence, SMM expects the operating rate at aluminum foil producers to fall dramatically to 63% in June.  

Data from the China Association of Automobile Manufacturers (CAAM) showed that automobile output and sales slipped on a MoM basis in April and May after hitting their peak in March. Meanwhile, auto exports grew at a slower pace than domestic sales. This ate into demand for brazing composite materials, causing operating rates at aluminum sheet producers to fall.    

Demand for roll-coating aluminum plate/sheet and strip for outdoor use began to drop due to higher temperature, while demand for color-coating aluminum plate/sheet and strip for interior decoration has been stable. Demand for can materials and printing plates has been trending up. As such, SMM predicts that operating rates at aluminum plate/sheet and strip producers in June will remain virtually unchanged from May at 63%.