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Users of aluminium registered another downturn in operating conditions

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Christian Fernsby |
World   This signalled a deterioration in business conditions for the seventh month

Global users of aluminium registered another downturn in operating conditions during April, albeit one that was subdued compared to the start of the year.

New orders declined at a sharper rate, countering a slower fall in output.

The seasonally adjusted Global Aluminium Users Purchasing Managers Index (PMI) slipped fractionally from 49.3 in March down to 49.2 in April.

This signalled a deterioration in business conditions for the seventh month running, albeit one that was much softer than seen earlier this year.

Production at aluminium users fell further in April.

However, the rate of decline was marginal and the softest for six months.

This was driven milder drops in output at Asian and European users.

At the same time though, US aluminium users reported the first contraction in output since July 2017.

According to anecdotal reports, this was related to subdued demand growth and oversupplied customer markets.

By comparison, new orders at global aluminium users declined at a faster rate during April.

The pace of decrease remained modest though and softer than the average for the first quarter.

New work from abroad also fell at a sharper rate than in the previous month.

Regionally, demand at Asian and European users remained in contraction territory, with panellists partly attributing this to a sustained decline in new orders from the car industry.

Demand growth at US users meanwhile slowed to only a marginal rate.

Global aluminium users continued to report a fall in purchases in April, with latest data indicating a modest drop.

At the same time, stocks of purchases decreased at the least marked rate for seven months.

The employment sub-index noted another marginal fall in workforce numbers, marking the eighth successive monthly decline in jobs.

Nevertheless, weak levels of demand meant that firms were still able to reduce backlogs.

Companies using aluminium were led to reduce output prices in April for the first time in 32 months.

Hampered by low demand, many survey respondents lowered charges in order to attract new customers.

That said, firms were helped cooler inflationary pressure on input costs.

The rate of inflation dipped to the secondlowest in over three years, due to softer price increases for US and European users.

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