Shanghai - Aluminium shipments from China, which climbed 43 percent in the first quarter, have probably peaked in the near term as the country’s sustained production dragged down prices, according to CLSA Ltd.
Exports of unwrought aluminium and aluminium products rose from a year earlier to 1.21 million metric tons in the January-March quarter, according to a statement released by the General Administration of Customs on Monday in Beijing. Shipments shrank 15 percent in March to 360 000 tons from the previous month, according to customs, as prices fell for a second month.
China, producer of about half the world’s primary aluminium, continues to add capacity, while smelters elsewhere struggle to cut enough supply to buoy prices. The surcharges that consumers pay to obtain the metal are falling from an all-time high as demand can’t keep up with record exports from China.
“The imports seen in the first quarter probably mark a near-term peak,” Ian Roper, a commodity strategist at CLSA, said by phone. “Prices have fallen enough that the Chinese economics for export currently don’t work.”
Europe premium
Aluminium for delivery in three months on the London Metal Exchange fell 0.3 percent to $1,760.50 a ton at 1.52pm in Hong Kong. Prices have retreated 5 percent this year. The premium added to the LME price for immediate delivery fell to as little as $225 a ton in Europe last week, the lowest for 15 months, according to Harbor Intelligence.
China produced a combined 4.6 million tons of primary aluminium in January and February, a record for the first two months of a year, according to data from Antaike Information Development. Aluminium product output surged 21 percent in that period to 6.9 million tons, according to the National Bureau of Statistics.
Alcoa, the largest US aluminium producer, forecast a global oversupply of the metal for 2015 and the slowest rate of growth in global consumption in three year. China will add more than 80 percent of new global capacity this year, according to the company’s data.
China’s net aluminium and product exports will exceed 5 million tons this year, representing about 18 percent of the rest of the world’s consumption and helping reduce the so-called all-in prices, which include LME cash rates and physical premiums, Citigroup said in a report on April 9.
Bloomberg