13 APRIL 2016Shanghai Metals Market
China's restarted and new aluminium capacity unlikely to contribute much to H1 output
Edited by : AL CIRCLE
1 min read
Continuous price recovery has triggered restart of idled capacity and commissioning of new capacity in Chinese aluminium market. How much output will those capacities contribute in the first half of this year?- SMM doubts.
SMM expects restarted capacity unlikely to exceed 300,000-tpy in the first half of this year, contributed mainly by smelters with power tariff subsidies and scale effect. These restarted capacities will contribute less than 50,000 tonnes to output in H1, though.
High restart cost and tight bank lending will deter many smelters from following suit. Besides, rising coal and alumina prices will also act as constraints, SMM aluminium analyst Liu Xiaolei explained.
As for new capacity, the figure is unlikely to surpass 500,000-tpy in Q2, with output contribution estimated at just around 70,000 tonnes, According to SMM survey.
About 20 per cent of operational aluminium capacity in the country is still suffering losses in terms of full costs even after aluminium prices rebounded to around 11,600 yuan per tonne.
SMM expects restarted capacity unlikely to exceed 300,000-tpy in the first half of this year, contributed mainly by smelters with power tariff subsidies and scale effect. These restarted capacities will contribute less than 50,000 tonnes to output in H1, though.
High restart cost and tight bank lending will deter many smelters from following suit. Besides, rising coal and alumina prices will also act as constraints, SMM aluminium analyst Liu Xiaolei explained.
As for new capacity, the figure is unlikely to surpass 500,000-tpy in Q2, with output contribution estimated at just around 70,000 tonnes, According to SMM survey.
About 20 per cent of operational aluminium capacity in the country is still suffering losses in terms of full costs even after aluminium prices rebounded to around 11,600 yuan per tonne.
Unlock full access – sign up for FREE.
Key benefits
Find exclusive data-driven insights and in-depth analysis
Get our daily newsletter delivered straight to your inbox
Access real-time and historical price trends from global indices
Post and respond to latest business leads
Stay ahead with alerts on learning tools
...and so much more!SIGN UP / LOGIN
Previous article
Vedanta Ltd announces Q4 and Full-Year 2016 production results
Next articleAluminium futures gain on spot demand
Grow with
AL Circle
