At a press conference held by the National Development and Reform Commission on February 24, Congliang, secretary general of the National Development and Reform Commission, said that the resumption rate of industrial enterprises above the national scale has gradually increased, of which Zhejiang has exceeded 90%, and Jiangsu, Shandong, Fujian, Liaoning, Guangdong and Jiangxi have exceeded 70%. In key industries, the resumption rate of iron and steel enterprises is 67.4%, that of non-ferrous metal enterprises is 86.3%, the recovery rate of coal mine production capacity is 76%, the number of railway loads has returned to about 95% of the normal level before the festival, and civil aviation, ports and water transportation are all in normal operation.
According to the SMM survey data, we have sorted out the resumption of work in various industries downstream of aluminum in detail, and forecast the market situation in February:
Aluminum upstream electrolytic aluminum smelters are relatively less affected by the epidemic. Some aluminum bar factories in Qinghai and Ningxia also produce normally during the Spring Festival, while Inner Mongolia, Xinjiang and other local rod factories partially reduce production during the Spring Festival. In January this year, the average operating rate of electrolytic aluminum enterprises across the country was 89.5%, and the operating rate is expected to remain flat in February.
The operating rate of aluminum strip enterprises was around 62.3% in January, down 9.22 percentage points from December last year and 2.6 percentage points from the same period last year. In terms of enterprise size, the operating rate of large, small and medium-sized enterprises dropped by 9.84%, 9.25% and 11.72% respectively compared with the previous month.
Specifically, the enterprise order and production situation are relatively similar to those in December last year. Some large plate and strip enterprises in Henan, Shandong, and Fujian implemented non-stop production measures during the Spring Festival, and small and medium-sized enterprises basically had a holiday in mid-late January, and production did not resume until the end of January. Most enterprises report that the demand for cans, machinery and equipment and the construction industry is flat, and due to the high aluminum prices before the festival, the stock of raw materials is not obvious, and due to slow logistics and poor shipping during the Spring Festival, most enterprises have high inventory of finished products, and traffic controls have been implemented in various places in February, so that the procurement of raw materials and the delivery of finished products are affected, and the industry as a whole is pessimistic about February. The operating rate of aluminum plate and strip enterprises is expected to drop to about 57% in February.
The operating rate of construction profile enterprises in January was 35.6%, a sharp drop of 21.2 percentage points compared with December last year, because this year's Spring Festival holiday was earlier than that of last year, construction profile enterprises began to have a concentrated holiday and stop work in the middle of January. Some enterprises opened less or did not start work in January, and the inventory of raw materials increased, but the stock of finished products decreased compared with previous years, and enterprises waited until the end of the year to deliver the terminal. Due to the delay of resuming work due to the impact of the epidemic, the operating rate of construction profile enterprises is expected to drop to about 27.4% in February.
The operating rate of industrial profile enterprises in January was 44.7%, down 13.3 percentage points compared with December last year. Orders for industrial profiles in January were mainly affected by the Spring Festival holiday, but the reduction was not obvious, especially the good performance of photovoltaic profiles. In addition, during the Spring Festival, some industrial profile enterprises still produce normally, and some terminals begin to place orders in advance at the end of the holiday. The impact of the epidemic on the supply and demand of industrial profiles is much smaller than that of building profiles. It is expected that the operating rate of industrial profile enterprises will rise slightly to about 45% in February.
The operating rate of aluminum wire and cable enterprises in January was 26.13%, down 7.57 percentage points from December last year. In January, the cable industry basically had a normal holiday, concentrated around the 20th, and some enterprises took the initiative to take machine maintenance, and the overall start-up declined significantly. A year ago, enterprises reported that due to the reduction in bidding volume at the end of the year and the high aluminum price at the end of the year, cable enterprises had less stock of raw materials before the festival, and the inventory of finished products increased to a certain extent. in February, because the overall inventory of raw materials was not high, due to the impact of the epidemic, traffic control cut off the procurement channels of post-festival raw materials, affecting the normal production of enterprises. It is expected that the operating rate of aluminum cable enterprises will drop to about 22% in February.
The operating rate of aluminum foil enterprises in January was 73.4%, down 12.1 percentage points from December last year. The outbreak aggravated the domestic automobile transportation resistance, resulting in a significant decline in the raw material inventory level of aluminum foil enterprises without their own electrolytic aluminum / aluminum foil billet production plants from January to February compared with the same period last year. At the same time, because the epidemic affected the start-up of their downstream terminals and the difficulties in the shipping port, the inventory of finished products of aluminum foil enterprises was also on the high side, and the start-up of downstream terminals after the festival was generally delayed. It is expected that the output and order volume of aluminum foil enterprises in February will be weaker than in January. The operating rate of aluminum foil enterprises fell to 72% in February, down 11 percentage points from the same period last year.
According to the results of the online survey conducted by Shanghai Iron and Steel Federation in February, among the 855 enterprises surveyed, 65% of the non-ferrous enterprises are not optimistic about revenue growth in the first quarter: 35% of them expect a decline of less than 10%, and 33% expect a decline of more than 10%. Only 10% of companies expect revenue to grow in the first quarter, while the other 24% are expected to be roughly the same as last year.
On the whole, as the epidemic situation has been gradually brought under control, the resumption of work by non-ferrous enterprises is also in an orderly process, and the current resumption rate has also returned to the level of 86.3%. However, the impact of the epidemic on the economy lags behind, which still has a great impact on enterprises in the non-ferrous industry, and the prices of non-ferrous metals have fallen one after another after the holiday. In the long run, we do not need to be too pessimistic. I believe that with the implementation of relevant national policies, the production and operation of the whole industry will be gradually restored.
