Poor demand, cash flow weigh on aluminium processing in Jul

SHANGHAI, Jul 31 (SMM) – Across the aluminium plate/sheet and strip industry, poor demand grew inventories of finished products. Plants grappled with tight cash flows and intensified competition as more new plants were commissioned. Anti-dumping and anti-subsidy measures by the US continued to affect exports. Exports took a further hit when the SHFE/LME aluminium price ratio rebounded to 7.     

Driven by demand for beer foil, household foil and air-conditioner foil, the aluminium foil industry notched a strong performance in July. New orders for air-conditioner foil fell sharply as most air-conditioner manufacturers began a seasonal break. 

The low season continued in the construction aluminium extrusion industry in July and high temperatures affected demand. Demand in the industrial aluminium extrusion industry also continued to decline in July due to poor demand from the railway, automobiles and photovoltaic sectors.

The aluminium wire and cable industry extended declines in July, but conditions are unlikely to deteriorate further. Large producersreceived few orders in the first half of the year and accounted for the sharp fall in overall production. Large producers began shifting to other industries. Tepid domestic orders drove producers to export.   

In the primary aluminium alloy industry, capacity that underwent maintenance in June returned online in July. Several manufacturers of wheel hubs closed on high temperatures in the summer, and this affected new orders at some producers. Declines in new orders eased backlogged orders.