Multiple Factors Exert Pressure, Aluminum Plate/Sheet, Strip and Foil Operating Rates Continue to Decline [SMM Analysis]

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SMM January 19, 2025:

According to SMM statistics, the operating rate of the aluminum plate/sheet and strip industry in December 2024 was 66.54%, down 1.71 percentage points YoY and 1.3 percentage points MoM. The operating rate of the aluminum foil industry was 61.46%, down 0.32 percentage points MoM and 11.67 percentage points YoY.

With the official implementation of the cancellation of aluminum semis export tax rebates, the rush for exports has subsided, and short-term demand from overseas customers has been met and supplemented. Leading enterprises, after the first round of processing fee negotiations with customers, have yet to achieve substantial breakthroughs and are currently settling at temporary prices, with a noticeable slowdown in order-taking pace.

On the other hand, the resurgence of environmental protection inspections in Gongyi, a major hub for aluminum plate/sheet and strip production, has significantly disrupted local enterprises' operations, prompting them to adjust production plans and focus on equipment maintenance. Although most domestic orders postponed in November due to the rush for exports were fulfilled in December, the severe contraction in overall market demand could not be offset. Under the pressure of multiple factors, the industry's operating rate continued to decline.

Additionally, many small and medium-sized enterprises reported plans to halt production and take holidays during this year's Chinese New Year due to insufficient demand. Compared to last year, many small and medium-sized aluminum plate/sheet and strip enterprises are starting their holidays earlier and extending the holiday period. Under the weight of multiple bearish factors, the operating rate of the aluminum plate/sheet and strip industry is expected to decline further.

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