SMM March 27, 2020:
During the epidemic period, SMM through the aluminum downstream processing leading enterprises start weekly tracking, in order to understand the most real aluminum downstream processing enterprises return to work. SMM survey samples are distributed in 12 provinces in China, a total of 41 enterprise samples, the specific distribution is as follows:
Generally speaking, the continuous recovery of domestic downstream demand has led to a continuous increase in the operating rate of the aluminum processing industry. Among them, due to the emergence of the original waste aluminum price difference, almost all recycled aluminum enterprises increased the proportion of A00 aluminum hedging costs, resulting in a significant relief of the problem of insufficient supply of waste aluminum, and a significant increase in the operating rate.
From the start point of view, the average downstream operating rate increased by 5.2 percentage points per week, the increase is the same as last week. Among them, from a sub-regional point of view, the start of construction in East and South China continues to maintain relatively rapid growth, and the weekly increase of processing enterprises in this region is more than 5 percentage points. According to different types, the start-up increase of recycled aluminum / cable / profile enterprises is the most obvious, and the weekly increase is also more than 5%. It is worth noting that the impact of the overseas epidemic continues to increase, and export orders are likely to decline significantly in April. At present, the bright spot of consumption in the aluminum processing industry lies in domestic aluminum profiles and cables. The increase in the start of recycled aluminum is mainly alleviated by the shortage of raw materials replenished by raw aluminum, but its start is still limited by weak consumption. It is expected that there will still be a small increase in the downstream operating rate of aluminum next week, mainly due to the continued recovery of domestic demand such as profiles / plates and strips.
Specific product types:
Primary aluminum alloy: the operating rate of primary aluminum alloy this week is the same as last week. Some of the cut-off capacity resumed last week. At present, the starting level of large domestic primary alloy enterprises is still slightly lower than before the Spring Festival, mainly due to the difficulty of raising orders from downstream wheel factories, while the recent intensification of the epidemic abroad has led to the obstruction of aluminum wheel exports, further dragging down primary alloy consumption. It is expected that the operating rate of primary alloy will continue to be stable next week.
Aluminum plate and strip: the operating rate of large plate and strip enterprises this week is basically the same as that of last week. Some enterprises have not taken the initiative to improve the operating rate, the reason is still limited by the low aluminum price to compress the profit space, downstream end customers hesitate to pick up goods, so enterprises are cautious in receiving orders. In terms of orders, corporate feedback on March orders is OK, but there is a superposition effect of orders in February, and orders in April are expected to be lower than in the same period last year, and overseas export orders have shrunk due to the escalation of the epidemic abroad. In terms of raw materials, at present, enterprises are still on the sidelines on the trend of aluminum prices in the future, and their enthusiasm for receiving goods is not high, mainly on demand. In terms of inventory of finished products, it is slightly higher than the normal situation.
Aluminum cable: the operating rate of large cable enterprises has increased significantly compared with last week. At present, large cable enterprises no longer have the problem of domestic staff arrival or domestic transportation, returning to 70-80% of the normal operating rate. In terms of orders, large cable enterprises generally feedback that there are not many UHV related orders received this year, most of which are still in production before the production of national network orders and distribution network engineering orders, and the production scheduling plan based on orders from March to April is still full, but may be slightly inadequate in May. In addition, there is feedback from enterprises that due to the impact of the overseas epidemic, the ports of the exporting countries are closed, and their products are difficult to receive by the enterprises where they are exported, and the inventory of finished goods remains high at present.
Aluminum profile: the overall operating rate of profile enterprises has increased slightly this week. Recently, the price of aluminum has fallen sharply, and the problem of placing orders in advance but not taking delivery still exists. The inventory of finished products in some profile enterprises is on the high side, while the sale and price increase of aluminum bar manufacturers have reduced the inventory of raw materials in some profile enterprises. Before this, the operating rate of enterprises in Hunan, Jiangsu, Fujian and other places did not change much, while the operating rate of some enterprises in Anhui, Shandong and Guangdong increased slightly, and the recovery situation was better than previously expected. Most enterprises are optimistic about the subsequent demand.
Aluminum foil: the operating rate of the aluminum foil industry this week is slightly higher than the previous week. From the product classification point of view, the current packaging aluminum foil and double zero foil order situation is better than air-conditioning foil. In terms of orders, enterprise feedback on domestic trade orders has not improved significantly; foreign trade orders have been affected by the intensification of the overseas epidemic, and the resistance to receiving orders has intensified, as some countries and regions, such as Malaysia and Europe, have been affected by the closure of ports, production enterprises have to negotiate with overseas customers to postpone orders or can only cancel them. At present, the production schedule of sample enterprises ranges from mid-April to May. Enterprises are worried about the future external demand, but there are some expectations for the warming of domestic trade orders.
Recycled aluminum alloy: the operating rate of the leading enterprises in the recycled aluminum industry increased only slightly this week. Due to the price difference of the original waste aluminum, almost all recycled aluminum enterprises increased the proportional hedging cost of A00 aluminum, which significantly alleviated the problem of insufficient supply of waste aluminum. But at the same time, due to the sharp fluctuations in aluminum prices, downstream die-casting enterprises wait-and-see mood, new orders are still less, coupled with the large number of aluminum alloy ingots imported by some enterprises, high inventory limits the recovery of the operating rate. In addition, due to the expansion of the impact of the overseas epidemic, large-scale shutdown of automobile plants, the demand for overseas recycled aluminum has been greatly weakened, and the start of recycled aluminum enterprises involved in export business has also been restrained. Demand for recycled aluminum is expected to rise slightly next week, overseas demand is likely to continue to weaken, and the operating rate of the recycled aluminum industry is still likely to increase slightly. At the same time, it is worth noting that the possible drop of goods in some high inventory enterprises is easy to cause a chain reaction, which makes the recycled aluminum industry reduce production and go to the warehouse as a whole.
(SMM Aluminum Group)
