Aluminium plate/sheet, strip and foil production and sales declined due to weak demand [SMM Analysis]

Published: Jul 23, 2024 11:26

Source: SMM

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According to an SMM survey, as the traditional off-season deepens, the order volume for aluminium plate/sheet, strip and foil producers continues to decline, and the industry's operating rate is gradually decreasing.

Since mid-2022, "weak demand" has become the main theme in the aluminium plate/sheet, strip and foil market. Producers have widely adopted a "price for volume" strategy, leading to a continuous drop in the processing fees for various aluminium plate/sheet, strip and foil products. For some products, the current processing fees are even lower than 50% of those two years ago.

As of July 19, sales personnel from multiple aluminium plate/sheet, strip and foil companies have pointed out that the current conversion margins for many aluminium plate/sheet, strip and foil products are already close to or even below the cost line, making further reductions impossible. Faced with insufficient orders, companies are no longer willing to cut prices to compete for orders and are more inclined to reduce production. Recently, the operating rate in the aluminium plate/sheet, strip and foil industry has also continuously declined.

Typically, July and August are the traditional off-season for the aluminium plate/sheet, strip and foil market, and currently, end-user demand has not yet recovered. With ongoing frictions in the overseas market, short-term demand in the aluminium plate/sheet, strip and foil market is unlikely to improve and is expected to continue weakening, with the industry's operating rate also expected to continue decreasing.

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