China aluminum market may face supply surge in the last half year

The overcapacity situation in China aluminum market may intensify in the last half year, because more new capacity will go into operation, and the import demand of China will be reduced.

News from the smelting plant showed that the consumption in the first half year went better than expected, and the trend will continue, but there will be no further growth.

The official data showed the import amount in the first year has sharply decreased  by 67%.

The supply surge will depress the price, early this year to now, the AL-A00-CCNMM price has decreased 5%.

The government has strengthen the administration of the existing and newly-built smelting enterprises, which will not reduce the output, but will restrict long-term expansion.

The current annual output is above 27 million tons, and 10 million tons new capacity is under construction.

The analysts predicts that this year, the new aluminum smelting capacity will be 3 million tons, most of which are from the northwest remote areas. there is at least 1.3 million tons capacity will go into operation in the next half year in Xinjiang province.

The official data showed that the output is 10.58 million tons, and in June, the output hit the record of 1.843 million tons.

The actual consumption reached 12 million tons, including the 300,000 tons purchased by the  State Reserves Bureau. If the economy keeps steady in the next half year, the demand may reach 24.5 million tons, expecting increase by 12.5% .