SHANGHAI, Aug 16 (SMM) – Chinese secondary aluminium producers operated at higher rates in July as orders at die-casting mills improved, especially in the second half of July, after demand bottomed out on large-scale destocking of cars in May-June. Carmakers and dealers attempted to clear inventories before new vehicle emission standards took effect in July, SMM learned. 

An SMM survey showed that operating rates across secondary aluminium producers in China rebounded to 55.28% in July. This was up 3.04 percentage points from June and 1.94 percentage points from July 2018.

Some downstream producers stepped up purchases ahead of the planned summer break in August, and this also bolstered the operating rates across secondary aluminium smelters last month. 

Secondary aluminium producers with seaborne scrap as feedstock enjoyed greater costs advantages over producers that used domestic aluminium scrap as raw materials. This allowed producers such as Ye Chiu Recourses and Zhaoqing Delta Aluminium to hike their monthly production in July to record highs of this year. 

SMM expects the operating rates across Chinese secondary aluminium producers to hold steady for August as summer break will see downstream demand easing after a rally.