SMM, April 3, 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:
Overall, the poor performance of new orders in April put the increase in downstream construction into a bottleneck. Among them, due to the significant decline in demand for cars and export-related sectors in April, the start of work downstream of aluminum next week is likely to show a downward inflection point.
From the start point of view, the average operating rate of the lower reaches increased by 0.7 percentage points per week, the growth rate slowed down significantly, after entering April, the start of the situation is about to appear inflection point. Among them, from a sub-regional point of view, only the start of construction in Guangdong still has a continuing upward momentum, which is mainly due to the continued rise in the start of downstream building materials enterprises. Classified, and exports, cars and other related sectors in April a significant decline in new orders, only exports accounted for a relatively small proportion of building materials, cables and other plates to support. Recently, due to part of the downstream looking for low replenishment, downstream raw materials / finished goods inventory has increased to a certain extent, under the dual pressure of order and inventory, it is expected that next week aluminum downstream processing enterprises order inflection point, start to decline.
Specific product types:
Primary aluminum alloy: the operating rate of the top five enterprises of primary aluminum alloy this week fell 6.6 percentage points to 61.8% compared with last week. Due to the reduction of orders from the wheel factory, some primary alloy enterprises reduce the start-up load, and some convert the ingot production line to A00 aluminum ingots. The decrease in orders for wheel factories is mainly due to the severe epidemic situation in foreign countries, which has led to the reduction or suspension of production in foreign car factories, and the aluminum wheels, which account for nearly half of the exports, have been greatly affected, and the delivery of many orders has been delayed. At the same time, the demand growth of domestic car factories and retail outlets has slowly superimposed on the backlog of aluminum wheel finished products. The possibility of more alloy plants reducing production during the period from April to May is not ruled out.
Aluminum plate and strip: the operating rate of large plate and strip enterprises this week is slightly lower than that of last week, mainly due to the recent decrease in new orders received by individual enterprises compared with the previous two weeks, and the lack of stamina of order growth, passive production reduction, other large plate and strip enterprises, own aluminum water enterprises still maintain a state of close to full production, other enterprises operating rate in the range of 60%-70%, and take the initiative to maintain a low operating rate. The reason for maintaining a relatively low operating rate is similar to that of last week, as aluminium prices have not risen sharply, squeezing corporate profit margins and temporarily cutting back on low-profitable lists. In addition, overseas orders, companies have reported a significant decline in orders from Japan, South Korea, Europe and the United States, exports are expected to continue to decline in April, and will drag down overall production in April from March.
Aluminum cable: the operating rate of large cable enterprises this week is basically the same as last week, with no significant change. Overseas, some enterprises feedback due to port logistics is blocked, delivery is limited, there are overseas customers withdraw orders or delay the pick-up phenomenon, the domestic side, the cooperation of the national network and municipal units and other customers are currently affected by the epidemic, the construction of related projects is difficult to carry out quickly, on the whole, customers pick up goods relatively slowly, the current inventory of finished products is relatively high. Raw material inventory, large cable enterprises mostly have a special futures position, stock volume will not be too large, according to upstream Henan Shandong and Inner Mongolia aluminum pole holder feedback, cable factory recent demand is still good, their own orders are relatively abundant, but a hunch that April good state is difficult to continue.
Aluminum profile: the overall operating rate of profile enterprises has not changed much this week. Because some profile enterprises do not have direct export business or the proportion of export business is on the low side, the overall production orders remain stable and are less affected by the overseas epidemic situation; some profile enterprises have obvious reduction in direct export orders, and customers engaged in photovoltaic and automobile profile export business are greatly affected, holding a pessimistic attitude towards profile export in the next month or two. Due to the good performance of domestic demand for real estate and infrastructure, construction profiles have made up for some of the reduction in exports in terms of orders. at present, the overall situation of construction profiles is better than that of industrial profiles.
Aluminum foil: the operating rate of aluminum foil enterprises this week is basically stable compared with the previous week. From a sub-product point of view, the demand for double zero foil is relatively poor, but the monthly warming, single zero foil internal and foreign trade are poor, air conditioning foil is still in the off-season, the demand is not good. In terms of orders, there is no sign of a pick-up in domestic trade orders, and the current situation of receiving orders in April is fair; however, the deterioration of overseas orders is obvious, and some countries have begun to seal off ports because of the accelerated spread of the overseas epidemic, and most of the new export orders received by aluminum foil enterprises have been delayed or cancelled. Research companies are pessimistic about exports. It is expected that the operating rate of aluminum foil enterprises will remain unchanged in April compared with March, but the overall order level will fall back due to the deterioration of exports.
Recycled aluminum alloy: this week, the operating rate of leading enterprises in the recycled aluminum industry has only increased slightly. Recycled aluminum enterprises are generally bearish on April prices, mainly due to the decline of terminal car consumption at home and abroad. In this context, after entering April, the leading recycled aluminum enterprises have appeared a certain low price order grabbing behavior, and the low price grabbing order atmosphere is gradually increasing. At the same time, considering that the domestic epidemic has not yet appeared a clear inflection point, the amount of imported waste aluminum will remain low. Although the domestic epidemic is basically under control, the output of waste aluminum still needs to recover, and it will still take time for waste aluminum holders to accept low aluminum prices. In this context, it is expected that the start of recycled aluminum enterprises next week will be difficult to continue to increase, or there may be a certain decline due to inventory problems.
(Shanghai Nonferrous Network Aluminum Group)