Operating rates across secondary aluminium producers rebound sharply in Mar

SHANGHAI, Apr 12 (SMM) – Operating rates across secondary aluminium producers in China averaged 61.13% in March, up 22.02 percentage points from February and 0.3 percentage point from March 2018, showed an SMM survey.

Weak export prices drove producers that use aluminium scrap imports as raw materials to the domestic market. Those producers lowered their offers to seize market share, with average production rising to the highest in close to two years, and this helped lifted the operating rates.

The sharp month-on-month increase in operating rates was also bolstered by greater demand. Downstream buyers brought forward their April orders to chase VAT invoices with a rate of 16% before the tax cuts took effect.

Operating rates across Chinese secondary aluminium producers are likely to fall to 55% in April as most die-casting plants in Jiangsu’s Kunshan suspended from the start of the month after a severe safety accident.

Front-loaded orders in late March have depleted demand in April, and this will also weigh on secondary aluminium operations.