Domestic aluminum billets production has declined for two consecutive months [SMM Analysis]

May was undoubtedly a challenging month for the domestic aluminum billet industry. Faced with high aluminum prices, low processing fees, and weak downstream operating rates, many aluminum billet producers in various regions were deeply affected by severe production cuts and suspensions due to significant losses. Some producers even had to opt for bankruptcy restructuring or business transformation due to broken capital chains.

Therefore, the SMM aluminum team once again adjusted the sample enterprises. According to the latest monthly survey data from SMM, the number of sample enterprises in the SMM aluminum billet monthly survey is currently 166, down by 8 from the previous month. The total capacity is 30.795 million mt, down by 200,000 mt from the previous month. In May 2024 (31 days), the total national aluminum billet output was 1.457 million mt, down by 15,000 mt MoM from April 2024 (30 days), a decrease of 1.0%; up by 40,000 mt YoY, an increase of 2.8%. The domestic aluminum billet operating rate in May was 56.8%, down by 0.2% MoM and down by 14.0% YoY. Despite having one more operating day in May compared to the previous month, both the output and operating rate of domestic aluminum billets still declined MoM, marking the second consecutive month of decline. In May, the output in the two major aluminum billet provinces of Shandong and Inner Mongolia stabilized, while the production cuts and suspensions were most intensive in the south-west China, particularly in Guangxi and Guizhou. In Tianyang area of Guangxi, most aluminum billet producers had suspended production for more than half a month.

Overall, entering June, as Guangxi has entered a full resumption, considering the current recovery and the number of operating days within the month, SMM expects that the domestic aluminum billet output in June will stabilize.