SMM, July 4, 2020:
During the epidemic period, SMM tracked the start-up situation of aluminum downstream processing leading enterprises on a weekly basis in order to understand the most real situation of aluminum downstream processing enterprises resuming 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 start-up of aluminum downstream processing leading enterprises has declined to a certain extent this week, except for profile enterprises, the start-up of other processing enterprises has declined to a certain extent, among which the start-up of primary aluminum processing section, primary alloy and aluminum cable has declined significantly. Specifically, end-car consumption has entered the traditional off-season, resulting in poor performance of primary alloys, recycled alloys and automobile plates, while aluminum cables are highly dependent on national grid bidding, and its new demand has been delayed in the future. it is also difficult to maintain the previous construction. At present, only construction-related orders are still relatively strong, but there is also feedback that new orders have weakened, and the new orders of some small and medium-sized enterprises in aluminum strip have declined. It is expected that after the off-season atmosphere thickens in the lower reaches of mid-late July, if overseas demand still does not improve significantly, the risk of new orders from processing enterprises will continue to weaken, and the corresponding start-up may also continue to decline.
In terms of specific product types:
Primary aluminum alloy: the reduction in orders for downstream aluminum wheels has reduced the start-up load of some primary aluminum alloy enterprises. This week, the operating rate of primary aluminum alloy leading enterprises fell back to 58.3%, 6.7 percentage points lower than in the third week of June. From July to August, many car factories in the off-season of traditional consumption in the automobile industry have planned to stop production, so the planned purchase volume of the aluminum wheel factory has also been reduced compared with the previous month. In addition, the reason for the high aluminum price is that most aluminum wheel factories are more cautious about the purchase of raw materials, and most of them will arrange the purchase only when they receive an order, and the safety inventory is low, in order to reduce the inventory pressure and reduce the start-up load of primary alloy factories. It is expected that the start-up of primary aluminum alloy leading enterprises will not change much next week.
Aluminum strip: the operating rate of large plate and strip enterprises is basically stable this week, due to the backlog of orders, the operating rate did not decline significantly, but the number of new orders continued to be weak. At present, the orders of plate and strip enterprises, which are mainly engaged in the production of can materials, have improved significantly compared with those at the beginning of June, and the scheduling period has also been extended to more than one month, but the orders of other enterprises have significantly reduced, and the scheduling period can only last about two weeks. On the product classification, the automobile plate and strip still did not improve, the building plate and strip began to show decline, and the feedback of other products was mediocre. It is worth noting that a large plate and strip enterprise in Henan said that in addition to the relatively stable production and sales of several local large-scale plate and strip enterprises, the orders of more small and medium-sized enterprises were directly halved, and the decline in industry operating rate in July was almost certain.
Aluminum cable: the operating rate of large cable enterprises this week is slightly lower than that before the festival. At present, according to the feedback of enterprises, more than half of the aluminum-related orders received a year ago have been completed, and after mid-July, we need to begin to digest the new orders received this year, while this year's new aluminum bidding volume is still not much, relatively speaking, copper cable orders are better, July aluminum cable operating rate may be difficult to maintain a full state in April-May, individual enterprises said that they may have order downtime, and they are more worried about July.
Aluminum profiles: the operating rate of large-scale enterprises of aluminum profiles has not changed much this week, leading enterprises have abundant orders, waiting for production orders are generally more than 1 month, and some orders are exuberant in about 2 months. Domestic demand, especially the related demand for construction profiles, remains high, and large enterprises have good feedback on orders for engineering projects and dealers. The improvement in exports is limited, with the export volume of some enterprises falling by more than 20% compared with the same period last year. In terms of raw materials, affected by strong aluminum prices, processing fees continue to fall, large-scale enterprises mostly purchase aluminum ingots and aluminum bars in the form of long orders, and replenish more on demand when the base price is on the high side. The orders of small and medium-sized profile enterprises weakened obviously in June compared with the previous month, and the expectation for July is also stable and weak, but it is unlikely that the operating rate of large enterprises will be reduced in July.
Aluminum foil: the operating rate of large aluminum foil enterprises remained relatively stable this week. Large aluminum foil enterprises basically maintained normal production during the Dragon Boat Festival period, because there was a large backlog of orders in the early stage, and the operating rate did not decline significantly after the festival. Some battery foil and electronic foil enterprises said that their orders declined after July, but the orders of the main flexible packaging foil, food packaging foil and air conditioning foil enterprises were relatively stable. In terms of exports, the enterprises said that they were not significantly affected by the epidemic, because the foreign economy gradually recovered. The aluminum foil export enterprises are more diversified, so the export end is more stable. Relatively speaking, aluminum foil enterprises have a more neutral attitude towards July, and their feedback is better than that of plate and strip enterprises.
Recycled aluminum alloy: the start-up of leading recycled aluminum enterprises decreased by 3.1% this week, mainly due to a slight reduction in production due to a reduction in new orders from some enterprises in July, while sales of imported aluminum alloy ingots showed no signs of weakening. On the whole, the current domestic and foreign demand for recycled aluminum has no significant change, due to the time to the traditional off-season, downstream demand in hot weather has the risk of continuing to weaken, while foreign demand has slightly recovered, but it has not yet been conveyed to the domestic market. In terms of policy changes in the import of waste aluminum, the traditional six types of waste aluminum decided to continue to implement the approval system in the second half of the year, and according to enterprise feedback, the volume of Q3 batches was the same as that of Q2. At the same time, the new standard of waste aluminum, "recycled cast aluminum alloy raw materials", has not yet been implemented due to many factors, such as tax code number, implementation process and so on, so it has a limited impact on the domestic market in the short term. In terms of aluminum bars, due to the continuous rise of aluminum base prices, the processing fees of aluminum bars have almost fallen back to the level of the same period last year, but the relatively high prices have greatly weakened the willingness to purchase downstream, on the one hand, the purchase of raw materials in the lower reaches has been reduced. on the one hand, the proportion of waste aluminum has increased slightly. It is expected that enterprises with insufficient orders next July may continue to reduce production, but the sales of imported aluminum alloy ingots are still unaffected because the new import mark is difficult to land in the short term.
(Shanghai Nonferrous net Aluminum Group)