Rising Demand & Eased Cost Pressure Provoked Aluminium Prices to Soar

Shanghai: According to our sources, the operating rate for Chinese Aluminium rose by roughly 1.5 percent from a week ago to 58.5% last week but fell by nearly 5.7% before the Labour Day holidays. As most enterprises returned to their production after Labour Day, operating rates in the Aluminium sector have improved. The sectors of Aluminium plate/sheet, strip, and primary Aluminium alloys all remained nearly stable. The mainstream consumer areas are steadily recovering from the pandemic, and production in the Aluminium alloy, wire & cable, and extrusion industries is anticipated to increase. The pandemic has particularly impacted the domestic vehicle industry, with demand for automotive alloy and industrial extrusion dropping short of predictions.

Many manufacturers in Jiangsu, Zhejiang, and Shanghai, on the other hand, are expected to gradually resume their production and believe that their products and orders will improve in May, potentially boosting the recovery of automobile-related Aluminium processing industries. Most of Guangdong's Aluminium market players returned to pre-holiday production levels. As per our sources, the downstream consumption will gradually recover after the domestic epidemic is well controlled. Aluminium prices have dropped, urging downstream players to manufacture.

After the improved pandemic situation in eastern China, the production traffic is slowly allaying. At the same time, the Aluminium Alloy factories preserved a stable production rate amidst the highly volatile costs of Aluminium and the backlog of finished goods. According to our sources, the new overseas orders were sluggish. The dwindling new orders coupled with the enormous backlog orders further provoked prominent manufacturers to hold stable production in the Chinese spot market.

As per the ChemAnalyst, " If the pandemic situation improved further in the future, the rally of the downstream demand may push up the Aluminium production rates and the consumption level in the industries. Amidst that, the weak demand for Aluminium from automotive industries and the upcoming off-season may restrict the soaring operating rates".