[Al] CBI Survey -- Operating Rates at Aluminum Plate And Sheet Producers

SHANGHAI, May 20 (CBI China) -- A recent CBI survey of 26 aluminum plate and sheet producers (total capacity: 2.6537million mt/yr) revealed the following insights:

    1) Operating Rates

    According to the survey, operating rates at the 26 aluminum plate and sheet producers experienced significant increases during April due to improved consumption, and in line with CBI’s previous forecast.  Although current operating rates were still lower than last year, the 65% operating rate has been in line with market expectations with regard to a recovery of demand in China. Operating rates at large producers were the highest of all producers, although operating rates at medium and small producers experienced significant increases.  Operating rates at medium producers were higher than the industry average.

    2) Forecast of May Orders

    Operating rates at aluminum processing producers reported significant improvements during the first four months in 2009, but the high growth rate will unlikely continue during May. According to the CBI survey, nearly 60% of producers believed orders would continue to grow during April, but only 25% believe orders will continue to grow during May, with another 50% of producers saying orders should remain stable during May.  Most aluminum plate and sheet producers told CBI that new orders from downstream industries fell dramatically from late April, but a surplus of existing  orders help maintain output. CBI believes two reasons contributed to order declines. First, market players overestimated the consumption recovery, and the lower growth rate of actual demand resulted in the slowing of new order growth. Second, selling prices of refined aluminum were in line with SHFE spot-month weighted average prices, but current spot prices for aluminum are now lower than weighted average prices, eroding buying interests from downstream industries.

    3) Forecast of May Prices

    According to the survey, producers were uncertain with regard to May aluminum prices.

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