SHANGHAI, Jul 5 (SMM) – Current adequate supplies of spot aluminium ingots,the prospect of poorer downstream consumption in a slow season of July-August, and new, resumed capacity will continue slow trades of aluminium ingots in the northern Chinese markets in the medium term, SMM believes.
Transactions of aluminium ingot across markets in the north, such as Shandong, Henan, and Tianjin, weakened considerably from a month ago, as more cargoes arrived and downstream producers cut production in a slow season, an SMM survey found on Thursday July 4.
Aluminium ingots sold in the north-eastern Chinese markets are mainly supplied by smelters in Inner Mongolia. SMM learned that some new, recovered capacity will come online in Inner Mongolia, Shanxi, and Shandong areas in the third quarter. This is set to further expand the supply of aluminium ingots in the north.
A large aluminium processing mill in the north-east told SMM that it sold its stockpiles of aluminium ingots after fewer orders slowed its operating rates. This reinforced worries about a supply glut in the market.
Preferential freight charges from Xinjiang, a major production area of aluminium, to Zhengzhou of Henan province partly accounted for greater arrivals in the north.