Operating rate at aluminium extrusion producers extends decline in Aug

SHANGHAI, Sep 21 (SMM) – Operating rate across 50 Chinese aluminium extrusion manufacturers extended its decline in August on weaker demand from the construction extrusion sector, SMM research found.

In August, those surveyed manufacturers operated at 57.3%, down 2.2 percentage points from July. Operating rate for construction extrusion sector fell 2.46 percentage points from July to 57.94%, while that for industrial extrusion sector inched up 0.22 percentage point to 51.02%. 

Operating rate across large-scale manufacturers came in at 63.89%, the rate across medium-sized ones stood at 52.83% and that across small ones up to 20.37%.

Deteriorating cash flow issues across real estate companies dragged down orders at construction extrusion plants last month. However, the orders started to pick up in the latter part of September, with improved demand from downstream processing companies, SMM learned. This brings our estimates for construction extrusion plants’ operating rate up to 59% in September. 

For industrial extrusion manufactures, orders increased from downstream rail transport, automobile, and assembly line sectors in late August. Consumption from photovoltaic companies also rebounded after slid in July, but remained weaker from a year ago. SMM expects that the operating rate across industrial extrusion plants will rise to 55% for this month.

Amid cash flow pressure, raw materials inventories at aluminium extrusion producers fell to 12.08% last month. Inventories of finished products were little changed, at 37.69%.