For the first time since September 2018, global aluminium users reported an improvement in operating conditions in June, driven by a slight increase in output and a nearstabilisation in new orders.
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Firms expanded their purchasing activity while keeping employment level.
Input price inflation rose to a seven-month high.
The seasonally adjusted Global Aluminium Users Purchasing Managers Index (PMI) – a composite indicator designed to give an accurate overview of operating conditions at manufacturers identified as heavy users of aluminium – rose from 49.6 in May to 50.2 in June, signalling the first, albeit slight, improvement in business conditions at global aluminium users for nine months.
Asian aluminium users notably saw the first improvement in operating conditions since last September, while US users reported continued growth.
European users meanwhile saw another solid downturn in the health of the sector.
Output levels at global aluminium users expanded during June, following unchanged levels in May and a seven-month period of decline beforehand.
The rate of growth was only marginal though.
Meanwhile, aluminium users recorded a further fall in total new orders during June, although the decrease was fractional and the weakest in the current nine-month sequence.
This was due to a number of firms seeing demand increase over the course of the month, weighing firmly on those companies that saw sales decline.
Export orders dropped at the weakest rate in over a year.
Employment was broadly unchanged at the end of the second quarter.
Higher output requirements led some firms to hire additional workers, whereas others, notably in Asia and Europe, reported a reduction in staff numbers.
This allowed companies to limit backlogs, albeit fractionally.
At the same time, purchasing activity at global aluminium users increased for the first time in nine months.
Panellists related this to the rising level of production.
However, firms still had to deplete their inventories during the month to sustain output growth.
Input prices rose at an faster pace in June, with the rate of inflation quickening to a seven-month high.
Notably, Asian users saw a marked acceleration in overall cost inflation, attributing this to higher raw material prices and transportation fees.
Global aluminium users passed some of the cost burden on to consumers in June, as overall output prices increased for the first time since March. ■