Aluminium user sales fall for second month runningChristian Fernsby ▼ | February 10, 2020
The Global Aluminium Users PMI signalled a further slide in new orders at the beginning of 2020, amid reports of weaker domestic and foreign demand at aluminium-using manufacturers.
Business Weaker domestic and foreign demand
Cost pressures increased at the quickest pace for ten months, amid higher aluminium prices, spurring firms to pass costs onto clients through a faster rise in output charges.
The seasonally adjusted Global Aluminium Users Purchasing Managers Index (PMI) edged up from 49.6 in December to 49.9 in January, fractionally below the 50.0 no-change mark, signalling that operating conditions were broadly unchanged at the beginning of the new year.
Output at global aluminium users continued to expand during January, marking the fifth successive month of increase.
However, the rate of growth slowed to a four-month low due to back-to-back drops in new orders.
Regionally, Asian users of the metal recorded only a modest upturn in production.
European users noted a further downturn, albeit at a weaker pace, while US manufacturers using aluminium saw a renewed rise in output.
Demand Production at global aluminium users was weakened by a further contraction in new orders in January.
The drop in order books was marginal though, and softer than the month before.
Where a decline was seen, firms commented on falling domestic and foreign demand.
Export weakness continued into the new year, with users reporting a twenty-first successive month of falling new orders from abroad.
Moreover, the rate of decrease was the quickest since last September.
Lower sales led to another reduction in staffing levels in January, with employment at aluminium-using firms falling at the fastest rate since August 2016.
Input buying also decreased, extending the current run of contraction to three months and leading to a further decline in inventories of purchased goods.
Meanwhile, higher prices of raw materials, including aluminium, caused input costs to rise at a faster pace in January, with the rate of inflation accelerating to a tenmonth high.
Consequently, manufacturers raised output charges at the quickest rate since November 2018, though the uptick was only modest overall. ■