The purchasing managers’ index (PMI) for the downstream processing industries of aluminum in June stood at 46.6, according to our survey.
This was down from 54.8 in May, and fell below the 50 mark that separates expansion from contraction.
In the aluminum plate/sheet and strip industry, June’s production index dipped to 40.9, from 72.7 in May, and new order index dropped to 29.9, from May’s 42.2, as the industry entered slow season in June. Orders declined for heavy, medium, and thin plates/sheets used in the petroleum and petrochemical industries, hot-rolled coils, construction-use panels, as well as aluminium-plastic composite panels.
The PMI for aluminum foil industry registered 64 in June, inching down from 67 in May. While demand for pharmaceutical-use foil slowed down, consumption for beer and air-conditioner foil provided some support, which will sustain to July.
The PMI for aluminum extrusion for construction stood at 49.1 in June, lower from 54.2 in May, as small-sized producers shut down for rectification on environmental probes. The PMI in July is expected to remain at June’s level with support from large- and medium-sized plants.
We maintain our view that demand for aluminum extrusion for construction would account for the majority in domestic aluminium consumption this year.
For industrial aluminum extrusion, sharp decline in orders of photovoltaic aluminium extrusion weighed on the operating rates across the industry in June. The PMI fell to 27.5, from 59.7 in May.
In addition to falling orders, operating rates were further depressed by financial pressure across downstream processing producers, which shows no sign of improvement in the short term. The overall finished products inventory index, as a result, climbed up from 52.5 in May to 74.8 in June.