Aluminium prices drop across China on rising aluminium stocks; no confirmation on capacity cuts

<p>Discouraging all efforts towards capacity cut, aluminium stocks in China are continuously rising in July and August. &nbsp;SMM statistics showed that aluminium stocks in five major markets, including SHFE aluminium stocks have touched fresh record highs recently.</p> <p style="text-align: center;"><img style="vertical-align: middle;" src="http://www.alcircle.com/uploads/images/aluminum%20overcapacity.jpg" alt="News" width="517" height="226" /></p> <p>As of August 3, stocks in Shanghai stands at 275,000 tonnes, Wuxi &nbsp;at 566,000 tonnes, Gongyi at 95,000 tonnes, Hangzhou &nbsp;at 88,000 tonnes and Nanhai &nbsp;at 310,000 tonnes. All these five markets put together, the current aluminium stock stands at 1.33 million tonnes, up 51,000 tonnes from a week ago.&nbsp;</p> <p>SHFE Aluminium and A00 ingot prices soared in all markets after the much hyped higher-than-expected capacity cut rumours at China Hongqiao. Shandong Xinfa Group has also announed completion of shutdown of 426 electrolytic cells, with a capacity of 530,500 tonnes as of July 28.</p> <p>But, with the fading away of such rumours, aluminium prices have dropped in just one day.</p> <p><a title="AlCircle Report" href="http://www.alcircle.com/exclusivereport/?m=exclusivereport" target="_blank"><img style="vertical-align: middle;" src="http://www.alcircle.com/uploads/images/Report1banner.gif" alt="News" width="480" height="82" /></a></p> <p>China Aluminum International Trading Co. (Chalco Trading) has cut aluminium prices it offered in major markets today after yesterday&rsquo;s dramatic hike. SMM says that the sudden hike on August 4 was just a temporary outcome of the rumour that China Hongqiao Group will slash substantial aluminium capacity.&nbsp; Today, aluminium prices are cut across-the-board as there is no solid ground beneath such curtailment news and the positive market sentiments are just temporary trends.</p> <p style="text-align: center;"><img style="vertical-align: middle;" src="http://www.alcircle.com/uploads/images/chalco%20price3.png" alt="News" width="434" height="207" /></p> <p style="text-align: center;">Unit: RMB/t</p> <p>The Chinese market is expected to remain volatile till the time there is any confirmation on solid capacity cut and the inventories are within control.&nbsp;</p>