SHANGHAI, Apr. 16 (SMM) – Production rate at Chinese aluminum fabricators is expected to remain little changed in April, according to a Shanghai Metals Market's survey.
Average operating rate at Chinese aluminum extrusion producers is expected at 64% in April, flat with March’s level, but down from the average of 70% from the same period last year, the latest SMM survey revealed.
The year-on-year drop in the rate is believed to be due to a sluggish property sector. Banks have tightened lending for property-related enterprises, so aluminum extrusion producers and traders are now more cautious when deciding to supply goods to property developers. A depressed housing market is forcing construction enterprises, curtain wall companies and distributors to scale back inventories, cutting demand for aluminum extrusions. Tighter liquidity also means that aluminum extrusion producers are now demanding more cash terms from buyers as well.
The average operating rate at aluminum plate, sheet, strip and foil producers is expected at 63%, largely unchanged from March, according to the SMM survey. Despite steady sales, many end users will scale back raw material purchases or ask aluminum processors to shorten delivery time as liquidity tightens and since end users have yet to run out of stocks purchased after the Chinese New Year holiday.