Chinese aluminum market remains flat on high production and weak demand

Reportedly, Chinese aluminum prices may keep flat due to high production and weaker demand in the coming two months.

It’s estimated that 1.5 million tonnes of new annual capacity will come on stream during June and July. Also, the monthly production hit the record high of 1.46 million tonnes in April.

According to statistics, China produced 8.2 million tonnes of semi finished aluminum in the first 4 months of this year up 37% year on year. At the same time, the exports increased sharply by 38% to 880,000 tonnes.

However, industry sources said that the high exports of semi finished aluminum products have been decreasing the inventories in the major markets such as Shanghai, Wuxi and Hangzhou and Nanha to 600,000 tonnes.

Analysts pointed out that aluminum prices increased in last week, driven by the government’s power limitation policy. However, the price hike of electricity would increase the smelters’ production costs and force some of them to reduce output.