Aluminium prices in China are range bound today on the announcement by VC of the National Development and Reform Commission (NDRC) that China will continue to cut aluminium capacity in 2018. Since, no specific policy was announced; SMM observes market fundamentals to have more impact on the price movement in the near term.
Average A00 Aluminum Ingot prices increased from RMB 14,060 per tonne to stand at RMB 14,080 per tonne. The prices are expected to range within RMB 14,060 to RMB 14,100 per tonne and spot discounts are expected to settle at RMB 160 to 120 per tonne. Average primary ingot prices registered mixed trend across all domestic markets registering moderate increase in a few markets and dropping in another.
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Aluminum Alloy (ADC12) price in South China market has registered an increase to RMB 15,900 per tonne. On the cost from alumina prices remained unchanged today, but Chalco Alumina prices plunged to RMB 2740 per tonne from RMB 3320 per tonne. This is the first major drop in the price offered by the biggest alumina producer in China since December 2017.
Some Chinese aluminium producers that shut smelters during a winter crackdown on pollution may not reopen this spring once output curbs are lifted, as planned new capacity by state-run companies threatens to overwhelm demand and cut into profits. This will keep the capacity in check in the near term keeping the price high.
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