Robust Aluminum production in China – Commerzbank
According to data from the statistics office, Aluminum production in China, the most important producer country, declined slightly in June compared to the previous month, Commerzbank's Head of FX and Commodity Research Thu Lan Nguyen notes.
Aluminum production in China remains a negative factor for prices
"However, this is not surprising, as production had reached a new record high in May. Since the Aluminum industry is actually subject to a government-imposed production cap of 45 million tons per year, smelters must curb their operations, otherwise the limit would be exceeded."
"Over the past six months, production averaged 3.78 million tons per month, which would correspond to 45.4 million tons for the year. A slight reduction in production in the second half of the year should therefore be expected."
"However, it remains to be seen whether this will actually happen. After all, Chinese smelters have recently become somewhat more profitable again thanks to falling alumina prices. The current high level of Aluminum production in China remains a negative factor for prices for the time being."
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FXStreet Insights Team
FXStreet
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