Output growth moderates amid contraction in new orders for aluminium usersChristian Fernsby ▼ | January 9, 2020
December data signalled a slight downturn in the global aluminium-using industry, amid a renewed decline in new orders that moderated output growth and led to a reduction in workforce numbers.
Industry Global Aluminium Users Purchasing Managers Index
The seasonally adjusted Global Aluminium Users Purchasing Managers Index (PMI) fell below the 50.0 no-change mark in December, posting at 49.8 to indicate a slight deterioration in the health of the aluminium-using industry following two successive months of expansion.
That said, the index remained above its 2019 average of 49.5, the worst annual performance in seven years.
Production growth at aluminium users weakened for the second month in a row in December, as companies faced a renewed drop in new orders.
At the regional level, Asian users saw the slowest rise in output for three months, albeit still solid, while production at US users was unchanged after three consecutive months of growth.
Meanwhile, European users of aluminium recorded the sharpest decline in output for over seven years, linked to weak economic conditions and political uncertainty.
New orders at global aluminium users fell during December.
The result marked the first decline in demand since September, albeit one that was only marginal overall.
New foreign orders also remained weak, with latest data indicating the twentieth successive month of contraction.
As with output, European users saw the fastest drop in new work in over seven years.
Notably, the US was the only region to record higher sales during the month, as new orders received by Asian users was broadly unchanged.
Weaker demand affected hiring decisions in December, with employment falling at the joint-quickest pace in ten months.
Nevertheless, capacity pressures remained subdued, with backlogs dropping slightly.
Inventories of raw and finished items also continued to deplete.
Input cost inflation was again weak in December, posting the second-softest rise in cost burdens in the current 46-month sequence of expansion.
As a result, aluminium users raised selling prices only marginally, with inflation centred on US users.
Asian users meanwhile kept charges level with that seen in November, amid unchanged input costs.
European users meanwhile reduced output prices at the quickest rate since April 2016. ■