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Analysis of aluminum rod production operation in China in July 2023

August 13, 2023
In July 2023, the consumption of aluminum ingots processing fees gradually increased, the daily trading period, the holders have shown a price trend, there is a shortage of supplies in some areas, the phenomenon of tight, in this case, the early accompanied by reduced production of rod factories have taken action, the resumption of production tide also gradually opened the rhythm of promotion in different periods of the month.
According to Mysteel statistics, as of July 2023, China's effective aluminum rod capacity was 29.82 million tons, the same as in June. In the current period, no new projects have been completed in China, of which Shandong, Inner Mongolia and Guangxi still occupy the top three seats in the capacity scale.
In July 2023, the average capacity utilization rate of China's aluminum rod was 55.63%, and the local capacity utilization rate of Inner Mongolia, Xinjiang, Qinghai, Gansu and Shanxi exceeded the national average level, while the rest of the country was lower than the domestic average point. Due to the reduction of production in the early period, coupled with the time difference of the resumption of production in the month, the capacity utilization rate of major output bases such as Shandong, Guangxi and Yunnan in July did not quickly rebound to above the average line.
Compared with June 2023, the domestic aluminum rod operation capacity in July decreased by 3.94% month-on-month, of which, except for the relative flat and slight increase in individual regions, most regions were in the situation of month-on-month value decline, of which Henan and Guizhou regions showed a relatively prominent decline, the ratio fell by more than 10%.
According to statistics, in July 2023, China's aluminum rod production was 1.365 million tons, a decrease of 3.87% from the previous month and an increase of 8.98%.
Since May 2023, the monthly production of domestic aluminum rods has climbed to 1.5 million tons above the threshold, and the output of aluminum rods has continued to decrease in the past two months, but in relative terms, the overall quantitative comparison with the same period last year is still running at a high level.
Due to the intensification of the transmission of strong and weak supply, the load of enterprises is severe, and since June, aluminum rod production enterprises have successively reduced and stopped production, and this phenomenon has continued to mid-July.
Through the weekly production variable, we can clearly see that since the high weekly production value reached 350,000 tons in May, the weekly production gradually decreased in June, and the current weekly production has fallen to 310,000 tons by the end of June. Subsequently, the decline was still the same, and the weekly production value in mid-early July moved down to only about 300,000 tons, while at this time, some rod plants resumed production and the subsequent production increase was accompanied by an increase in aluminum rod weekly production from a decrease to an increase, and by the end of July, aluminum rod weekly production was temporarily increased to more than 320,000 tons.
From the point of view of the performance of various places, the quantitative output of the areas where the previous reduction and production were mainly concentrated, such as Inner Mongolia, Guangxi, Yunnan, Shandong and other places, is in a recovery trend, but there are still some areas that are still free from the reduction trend, such as Sichuan and Chongqing and Henan.
As of the end of July 2023, according to statistics, the current stock of finished products in China's aluminum rod production enterprises was 85,200 tons, a reduction of more than 20,000 tons compared with the beginning of July, and a reduction of more than 10,000 tons compared with the end of June.
In June 2023, the market weakened, the demand was sluggish, the inventory of manufacturers was overstocked, and by the end of June, the market generally presented a dull atmosphere, although it was gradually accompanied by a reduction in production, but the transmission to the consumption area still needed some cycle time. By early July, the total amount of aluminum rod factory warehouse exceeded 100,000 tons, at this time, the consumption of hoarding supplies gradually digested, some areas showed shortages, insufficient sound, in the case of manufacturers to speed up the delivery progress, the quantification of the factory warehouse gradually moved down.
Although, it is currently reported that under the influence of the priority delivery of green fruits and vegetables in the north, some areas have shown the phenomenon of vehicle tension and rising freight, but overall, it has not caused obvious factory warehouse accumulation, and because the consumption in July is slightly better than that in June, manufacturers are also trying to speed up the progress of supply circulation.
【 Summary 】
Although the monthly production value of domestic aluminum rods in July is still in a month-on-month reduction in the market, but under the promotion of production resumption and production increase, production is also in a constantly improving rhythm, at the same time, some enterprises have gradually returned to normal output operation. The follow-up still needs to pay attention to the landing and production process of new projects, as well as pay attention to the fluctuations of the spot market and the downstream raw material purchasing demand sentiment, so as to evaluate the possibility of readjustment of the rod factory's next production plan.
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