Overseas alumina prices continue to decline, domestic alumina price difference between north and south China narrows

This week, the operating rate of leading downstream aluminium processing enterprises in China continued to drop sharply by 6.3 percentage points W-o-W to 51.1 per cent. This week marked the last trading week before the Chinese New Year, and operating rates across aluminium processing sectors generally declined due to the holiday.

The operating rate of primary aluminium alloy fell to 51 per cent, with some enterprises slowing production or conducting maintenance, and further production cuts are expected during the holiday. Downstream customers in the aluminium plate/sheet and strip and aluminium foil sectors have completed stockpiling, leading to sluggish transactions and lower operating rates, though normal production is expected to continue during the holiday.

As the holiday period is concentrated this week and next week, the operating rates of wire and cable, profiles, and secondary alloy sectors saw larger declines and are expected to continue to drop significantly next week. Overall, all downstream aluminium sectors were significantly impacted by the Chinese New Year break, with operating rates weakening notably. According to SMM forecasts, the operating rate of leading downstream aluminium processing enterprises in China is expected to drop further by 7.5 percentage points next week to 43.6 per cent.