A356 Alloy Processing Fees in China Remain Stable in October on Balanced Supply and Demand

SHANGHAI, Oct. 28 (SMM) – A356 alloy processing fees in China remained stable in October on balanced supply and demand, Shanghai Metals Market (SMM) has learned.   

Processing fees of A356 alloy for delivery to factory in Jiangsu and Zhejiang provinces were 650 yuan per tonne, virtually flat at September levels.

Output at most producers surveyed by SMM remained stable in October. Zhejiang Huadong Aluminum Co. halted production, but this was offset by growing output at Henan Shenhuo Aluminum Co. and Xinjiang Zhonghe Aluminum Co. The result is that A356 alloy output grew 2,000 tonnes from September to 95,500 tonnes in October. Operating rates averaged 65.86%, also up 3.94% from a month ago. 

On the demand side, wheel manufacturers purchased on an as-needed basis against tight liquidity at the month’s end.  

SMM expects processing fees to remain stable over the next 1-2 months. Supply will increase at the end of the year due to commissioning of new capacity. However, this increased supply will be offset by wheel manufacturers building stocks for year-end production, which should help processing fees stabilize.