Last week, the operating rate of leading domestic aluminum downstream processing companies fell 1.1 percentage points MoM to 59.7%. Due to the real estate project suspension, leading construction extrusion companies began to reduce production and take holidays, affecting the operating rate. At the same time, the overall industrial extrusion industry also showed a gradual production reduction trend; although leading secondary aluminum alloy companies did not have a holiday this week, downstream die-casting plants have basically completed pre-holiday stockpiling. Coupled with the strong volatility of aluminum prices, companies have lowered their operating levels as demand continues to weaken. The operating rates of other sectors remained stable. Among them, the production of aluminum plate/sheet and strips, and aluminum foil will not stop during the CNY holiday, and the primary alloy and cable sectors are expected to have holidays. Overall, due to the rebound in aluminum prices during the week, downstream enthusiasm for stockpiling has weakened. At the same time, since late January, aluminum processing companies have entered the CNY holiday one after another, and the operating rate has resumed its downward trend. Next week, except for aluminum plate/sheet, strip and foil companies, most sectors will continue to have holidays and suspend production. The decline in operating rates will expand.
Primary aluminum alloy: The operating rate of leading primary aluminum alloy companies last week was still 49%. Although the operating rate remains stable, some alloy companies reported that their finished product inventories increased. The main reason is that as the Spring Festival is getting closer, many downstream customers plan to suspend production and take holidays during the CNY holiday, and the demand for stocking before the holiday is not strong. At present, a few alloy companies have stated that they may suspend production and take holidays during the CNY, and the industry's operating rate is expected to decline slightly in the next two weeks.
Aluminum plate/sheet and strip: The operating rate of leading aluminum plate/sheet and strip companies last week was still 73.4%. The market demand for aluminum plates and strips continued to weaken. Many small and medium-sized enterprises suspended production or announced holiday plans. Leading enterprises rarely take holidays. Although shipments have begun to decline as logistics resources gradually tighten, finished product inventories have increased. But it did not affect the production rhythm. The aluminum plate/sheet and strip market is not expected to see major changes in the short term, and the operating rates of leading companies may remain flat.
Aluminum cable: The operating rate of leading aluminum cable companies last week was 64.4%, flat WoW. In mid-January, leading aluminum cable companies have maintained stable production and shipments due to the demand for terminal delivery. Regarding holidays, corporate feedback mostly follows national holidays. However, post-holiday delivery pressure still exists, and some companies have production personnel return to work early to maintain production status. On the supply, as aluminum prices have fallen from highs, the demand for aluminum rods has picked up. However, most of the current purchases are mainly for rigid needs, and the stocking sentiment is not obvious. Most of them are waiting and watching, or stocking up in batches. In mid-to-late January, small and medium-sized enterprise cable factories have gradually entered holiday, while leading companies remained stable. It is expected that the overall aluminum cable operating rate in January will be stable with a slight decline. The operating rate of leading aluminum cable companies remained stable at 64.4%. In late January, due to the normal operation of transportation, the shipments of leading companies remained normal, and due to the demand for delivery of UHV orders, production was proceeding stably. According to research, some leading companies currently have a large number of UHV orders to deliver, and production personnel will return to work early for production. In February, they will mainly produce finished product inventories, and concentrated deliveries are expected to begin in March. The supply and demand pattern of aluminum rods fluctuated greatly with aluminum prices. In the first half of the week, due to the demand for stocking, aluminum rod factory shipments picked up significantly. However, in the second half of the week, aluminum prices were affected by changes in macroeconomic sentiment, and downstream companies were afraid of high prices and were not in a good mood to receive goods. In late January, approaching the CNY, companies are entering the holiday period one after another. It is expected that the industry will enter the off-season in February, and the overall aluminum cable operating rate will fall.
Aluminum extrusion: As the Chinese New Year approaches, according to SMM statistics, leading domestic aluminum extrusion companies gradually reduced production and took holidays, resulting in a significant decline in operating rates. The operating rate fell by 5.70 percentage points to 47.80% WoW. In terms of sectors, the operating rate of construction profiles continued to decline. Affected by the suspension of production and holidays for terminal real estate projects, construction extrusion companies across the country have generally experienced reduced orders and declining operating rates. Some small and medium-sized enterprises in Jiangsu, Guangdong, Shandong and other places have now suspended production and holidays. In the industrial extrusion sector, companies as a whole showed a trend of gradually reducing production . Some PV extrusion companies accelerated production due to downstream requirements for delivery before the year. The operating rate is stable; other extrusion processing plants are gradually reducing production and are expected to have holidays around February 3; automotive extrusion are generally stable but weak. A small number of automobile extrusion processing plants have stated that they will produce in shifts during the Spring Festival to meet the needs of overseas customers; other industrial extrusion have entered the production reductions before CNY. Overall, the domestic aluminum extrusion industry has entered the traditional pre-holiday production reduction period, and the operating rate has dropped significantly.
Aluminum foil: The operating rate of leading aluminum foil companies last week was still 75.6%. The aluminum foil market maintained its previous status during the week, with demand still light, but the production pace of leading companies can still be maintained. At present, most downstream companies that do not have a holiday during the CNY have completed pre-holiday stocking. The operating rate of leading aluminum foil companies is not expected to change significantly before the end of the CNY holiday.
Secondary aluminum alloy: The operating rate of leading secondary aluminum companies dropped by 1.1 percentage points WoW to 48.1%. Near the end of January, downstream die-casting plants have basically completed raw material stockpiling. However, due to weak demand and fluctuating aluminum prices before the year, the overall stockpile of die-casting plants is not high. In addition, with downstream holidays taking place one after another, transactions continued to slow down during the week. Some small and medium-sized secondary aluminum alloy companies have shut down their furnaces one after another. The holidays for large manufacturers are mostly concentrated in early February, but the operating rate has been slightly reduced. In addition, the manufacturers in the sample that directly supply aluminum liquid have not determined the holiday time yet, and it needs to be based on the holidays of downstream customers. They will usher in a concentrated holiday for secondary aluminum alloy plants, and operating rates will fall further by then.
