SHANGHAI, April 20 (SMM) – The People’s Bank of China (PBOC) will reserve requirement ratio (RRR) by one percentage point, the central bank announced on Sunday.
What impact will the RRR cuts have on aluminum market?
The monetary stimulus will boost aluminum market, but any price rally should be limited, given the poor market fundamentals, Guoxin Futures told SMM. Guoxin Futures added that power tariff cuts will weaken cost support for aluminum prices, another factor that will arrest sharp price gains.
The recent rise in aluminum prices was aided by China’s pro-growth policies and hopes for more stimulus measures, rather than an improvement of market fundamentals, Hongyuan Futures told SMM. The chronic overcapacity means that this round of RRR cuts will have limited impact on aluminum prices, Hongyuan Futures added.
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