SMM

In August, domestic primary aluminum billet production surged significantly, reaching a new high for the year. The daily average output of primary aluminum billets in August increased by 3,000 mt MoM to around 49,000 mt/day, reflecting the domestic primary aluminum billet enterprises' high expectations for the traditional September-October peak season. By late August, as the traditional peak season approached, there were already signs of recovery downstream, especially in the industrial extrusion sector, which was the first to get out of the industry's off-season. This recovery boosted the confidence of billet plants that had previously reduced or halted production due to various factors, encouraging them to strive to meet their annual production targets. According to the latest monthly survey data from SMM, the number of sample enterprises in the SMM primary aluminum billet monthly survey currently totals 169, an increase of 1 from the previous month. The total capacity is 31.205 million mt, an increase of 250,000 mt from the previous month. In August 2024 (31 days), the total national primary aluminum billet production was 1.513 million mt, an increase of 86,000 mt MoM from July 2024 (31 days), a growth rate of 6.0%; YoY, it increased by 157,000 mt, a growth rate of 11.6%. The domestic operating rate of primary aluminum billets in August was 58.2%, up 2.9% MoM. The increase in domestic primary aluminum billet supply in August was more concentrated in north China, especially north-west China. After the production reduction and suspension wave in north China ended in June and July, there was significant room for resumption in August. Regions such as Qinghai, Ningxia, Henan, Xinjiang, Inner Mongolia, and Shaanxi all saw MoM increases exceeding or approaching 10%. Meanwhile, the resumption of production in Guangxi and Guizhou in south-west China was mostly completed in July, with MoM increases in Yunnan and Guizhou provinces around 5%, while some billet plants in Guangxi saw slight reductions due to adverse weather conditions. Overall, entering September, the market has high hopes for the consumption performance during the traditional peak season. However, the construction material sector still lacks sustained improvement momentum. Currently, aluminum billet processing fees remain under pressure, and considering the reduced number of operating days within the month, SMM expects domestic primary aluminum billet production in September to remain largely stable.