The comprehensive PMI index for the domestic aluminum processing industry in May 2024 recorded 41.7%, remaining in the contraction territory. The inhibitory effect of high aluminum prices on downstream demand has become apparent, with the production index recording 43.3% and the new orders index recording 28%. Recent increases in overseas trade barriers affected some companies' new export orders, with the new export orders index recording 40.5%. Meanwhile, under high aluminum prices, the end-users' order pick-up speed slightly slowed down, with the product inventory index recording 54.5%. In May, except for the PMI index of the aluminum wire and cable sector being above 50%, other sectors were all in contraction territory.
In May, aluminum prices continued to fluctuate at high levels. The willingness to place orders in downstream end-user sectors was poor, and some aluminum processing enterprises experienced losses on previous orders. This led to a decline in production enthusiasm, resulting in a less-than-expected peak season. The NEVs and photovoltaic industries continued to reduce costs and increase efficiency, with low willingness to accept high aluminum semis prices. The industry saw a trend of replacing aluminum with steel and magnesium, affecting orders in aluminum processing industry. The PMI of aluminum processing enterprises fell below 50% in May. In June, the sentiment in end-user sectors remained cautious, with limited order growth. By late June, the aluminum processing industry will begin transitioning into the off-season, and overseas trade barriers caused further disruptions. As a result, the increase in aluminum semis export orders was limited. Based on the industry orders and production schedules, SMM expects the PMI to remain below 50% in June.
