China's aluminium consumption may increase with expected GDP grow of 6.9% in H12018

The entire Shanghai base metals complex moved forward as the dollar index slipped by 0.1 per cent to 89.29. Average Aluminium ingot prices remained unchanged today. However in the individual market, primary ingot prices registered some changes. Alloy prices have also remained unchanged today. Analysts expect the market to pick up with a boost in downstream demand.   

As reported by Shanghai Metals Market, China's northern province of Shanxi on Tuesday offered preferential access to bauxite resources to some of the country's biggest aluminium companies. This was on condition that they would set up or transfer smelting capacity to the region. This would boost industrial growth in the region. On March 26, Bauxite prices at Shanxi province increased to RMB 320 to RMB 400 per tonne. While imported bauxite (CIF China) price dropped to US$ 47.59 per tonne. With the slow restarting of capacities the raw material market is expected to start moving.  

According to a forecast by the National Academy of Economic Strategy of the Chinese Academy of Social Sciences released on Tuesday March 27, China’s gross domestic product (GDP) is likely to grow 6.8% in the first quarter of 2018 and 6.9% in the first half of the year.  The forecast indicates China would meet this year's annual GDP growth target of 6.5%. This indicates growth in aluminium consumption in 2018.  Only an unusual growth in downstream consumption can move the climbing aluminium inventory in the country and improve the market.

Data from the National Bureau of Statistics showed that profits at industrial enterprises across China in the first two months of 2018 grew 16.1% from the same period of last year. This growth was 5.3 percentage points higher than growth in December 2017 and reflected the buoyant momentum in the Chinese economy.