08 MARCH 2016Shanghai Metal Market
Aluminium smelters to benefit from SHFE delivery warehouse capacity expansion
Edited by : AL CIRCLE
1 min read
The Shanghai Futures Exchange (SHFE) recently approved 12 warehouses from eight companies for aluminium delivery.
The latest move by the SHFE will help facilitate hedging business for local aluminium smelters and processors, as well as reduce aluminium delivery costs, SMM aluminium analyst Liu Xiaolei said.
Every coin has two sides, though. Some aluminium smelters expressed concerns that production costs for deliverable aluminium will be 10-20 yuan per tonne higher than those for non-deliverable aluminium, due to high requirement on deliverable aluminium’s packaging, quality, etc. Smelters are more concerned with whether the price spread between deliverable and non-deliverable aluminium could offset additional production costs for the former.
Market players see a high possibility that the number of new SHFE aluminium delivery brands will increase this year.
The latest move by the SHFE will help facilitate hedging business for local aluminium smelters and processors, as well as reduce aluminium delivery costs, SMM aluminium analyst Liu Xiaolei said.
Every coin has two sides, though. Some aluminium smelters expressed concerns that production costs for deliverable aluminium will be 10-20 yuan per tonne higher than those for non-deliverable aluminium, due to high requirement on deliverable aluminium’s packaging, quality, etc. Smelters are more concerned with whether the price spread between deliverable and non-deliverable aluminium could offset additional production costs for the former.
Market players see a high possibility that the number of new SHFE aluminium delivery brands will increase this year.
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