Shanghai Sigma Keeps 45% Operating Rate in February

Shanghai Sigma Metals, Chinese largest secondary aluminium alloy maker, maintains the operating rate as low as 45% in February when the order receipt volume is unlikely to recover. The firm lowered its offer price against Japanese alloy users by $70 to CIF $1,490 per tonne from the end of 2008.

Shanghai Sigma’s secondary aluminium alloy production was 10,000 tonnes in January, decreasing by 2,000 tonnes from the previous month. The firm sold 8,000 tonnes to Chinese users and 2,000 tonnes to Japanese users. There was no order from Southeast Asia in January due to economy recession.

The firm started output volume adjustment along order shrinkage in December 2008. The operating rate was around 60% in December. The firm widened the output cut in January with continuous sales decrease. The sales to Japanese users are expected at around 2,000 tonnes in February when the actual demand is weakening and the alloy users are adjusting their inventories.

Secondary aluminium alloy price shows a sign to hit the bottom in Chinese market since the import price of US aluminium scrap surged, the main material. However, Shanghai Sigma decreased its offer price for Japanese market to reflect primary aluminium price down at London Metal Exchange and price competition with Taiwanese and Korean alloy makers.