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China Aluminum Smelters Likely To Accelerate Capacity -StanChart
Aug 2,2011 17:03CST
industry news
Source:SMM
In spite of a recent rally, aluminum prices may face downward pressure over the next six to 12 months as Chinese smelters ramp up their expansion of capacity.

BEIJING, Aug 02, 2011 (Dow Jones) -- In spite of a recent rally, aluminum prices may face downward pressure over the next six to 12 months as Chinese smelters ramp up their expansion of capacity, Standard Chartered said in a research note Tuesday.

Construction of around 1.5 million metric tons of new smelting capacity is likely to be brought forward, in addition to 600,000 tons already in the pipeline, the bank said, citing metals consultancy CRU Group.

"CRU expects 2 million tons of new smelting capacity to start commercial operation in 2012, bringing total capacity to 23 million tons a year," which is a new record for China, it said.

Aluminum prices have risen 5% since July 21 to their highest level since August 2008, which Standard Chartered attributes to tight supply fundamentals and limited near-term potential for large output increases.

Utilization of China's aluminum smelters stand at around 90%, as a resilient domestic construction sector offset weakness in the automotive sector, Standard Chartered said.

 


 
 

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