Aluminium: Inventories signal weak demand – Commerzbank

Barbara Lambrecht and Volkmar Baur at Commerzbank highlight diverging trends in Chinese metals. Aluminium output hit a record daily rate in April, driven by strong margins and breaching the official annual cap, yet domestic inventories have doubled to a six‑year high as demand lags.

Chinese production strength, demand concerns

"However, aluminium production stood out positively: in April, primary aluminium production was 3.1% higher than the previous year, following 2.7% in March. Daily production even reached a new record high of 129,000 tons."

"High margins – thanks to rising aluminium prices and favourable alumina prices – are driving production beyond the government’s annual production cap of 45 million tons. By way of comparison, production in April, extrapolated to the full year, stood at 47 million tons."

"Although China was able to significantly increase its aluminium exports in April against a backdrop of high production, inventories are nevertheless rising as domestic demand is not keeping pace. According to figures from the research group Shanghai Metal Markets, domestic inventories have doubled this year, reaching a six-year high of 1.37 million tons."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)