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[SMM Analysis] what are the reasons for traders to reduce the production of A356 in large factories?
Oct 14,2019 10:11CST
The content below was translated by Tencent automatically for reference.

SMM Oct. 14: recently, some traders feedback that a large southwest factory in East China market A356 spot tension, zero purchase basically can not find the goods. The rumor in the market was that the factory overhauled two lines in September, affecting production of 6000 tons. According to SMM, the rumor was wrong.

The actual situation is that when the aluminum price was high in mid-September, the enterprise mostly shipped goods to East China by steam. After the aluminum price fell back, it gradually increased the number of railway shipments, and the number of goods on the train platform and in transit increased. Secondly, due to the change in internal sales strategy, the enterprise plans to reduce the proportion of goods sold to traders, and at the same time develop more downstream customers to supply goods directly, so the circulation of goods in the link of traders is reduced.

Due to the increase in downstream customer orders, the enterprise's A356 production rose to more than 30,000 tons in September, a slight increase from the previous month. Inner Mongolia, Shandong and other regional enterprises have also increased production, A356 supply as a whole is relatively loose. Up to Friday, the processing fee of A356 in Wuxi warehouse was about 650-700 yuan / ton. (SMM Yang Xiaoting)


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