Aluminum prices plummet further as China's production surge adds to Glut

Aluminum slid to the lowest in almost two weeks as increasing supply from China adds to a global glut in the metal.

Chinese exports of unwrought aluminum and products swelled 35 percent in the first half from a year earlier to 2.5 million metric ons, according to customs data. While demand in the rest of the world will exceed supply this year, the excess supply in China will mean a global surplus of 500,000 to 1 million tons, according to Norsk Hydro ASA.

“A number of commodity complexes, ranging from aluminum, to copper, steel and oil among others, are all are saddled with too much supply,” Edward Meir, an analyst at INTL FCStone Inc. in New York, said in an e-mailed report. There’s “no willingness on behalf of their respective producers to ratchet down output in order to lend an element of support to prices.”

Aluminum for delivery in three months slipped 1.7 percent to settle at $1,661 a ton on the London Metal Exchange. Prices earlier touched $1,660, the lowest since July 8.

In June, output in China climbed 18 percent from a year earlier to a record 2.8 million tons, National Bureau of Statistics data showed July 17.

A “significant amount” of primary material is leaving the country disguised into shapes that circumvent the country’s tax rules, taking market share from other companies, Hydro’s Chief Executive Officer Svein Richard Brandtzaeg said in an interview Tuesday

Lead, tin, zinc, copper and nickel also fell on the LME. On the Comex in New York, copper futures for September delivery slipped 0.3 percent to $2.4745 a pound.