China Aluminum Stocks to Remain at Multi-Year Low in H2 2016, SMM Predicts

SHANGHAI, Aug. 25 (SMM) – Aluminum ingot stocks in China’s five major markets, though beginning to grow already, will remain near multi-year lows in the second half of the year, SMM expects.

China will add 2.5 million-tpy aluminum capacity in H2 2016, but these capacities will contribute only about 1 million tonnes of output, SMM estimates. 

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Besides, growing ratio of aluminum liquid use will curtail growth in aluminum ingot supply. SMM statistics showed the ratio of aluminum liquid consumption in China was 63% at the end of Q2 2016, up 5 percentage points from the end of Q4 2015. 

Alumina Prices Unlikely to Turn Worse in H2 2016, SMM Says   

On the demand side, demand from property market in H2 might not be as strong as in H1. The areas of houses newly started and completed both registered slower growth after June. Orders for high-voltage transmission lines will remain strong till October before falling during November-December. Overall, end-user consumption was not as bad as expected in Q3. SMM survey showed orders at downstream producers will grow in late 2016, which will help absorb growing aluminum supply, SMM explained. 

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