Holiday, weak demand sharply lower Feb operating rates across secondary aluminium producers

SHANGHAI, Mar 18 (SMM) – Operating rates across Chinese secondary aluminium producers fell to a record low in February, dragged by the CNY holiday and poor end-market demand.

Operation recovery across the secondary aluminium sector remained slow in March as the imminent VAT cuts kept consumers on the sidelines, which slowed the pace of consumption recovery and hampered production enthusiasm among secondary aluminium producers.

With the impending lower VAT, automakers cut prices to lower inventories and promote sales. Downstream consumption is unlikely to significantly improve in the near term as it will require some time for the new VAT to have an impact.

SMM expects operating rates across Chinese secondary aluminium producers are expected to rebound to about 50% in March.