China State Council confirms aluminium smelter capacity will be under “rigorous control”

<p>China&rsquo;s Work Safety Commission of the State Council has confirmed that domestic aluminium smelter capacity will be under &ldquo;rigorous control,&rdquo; a news that drove aluminium contracts at the Shanghai Futures Exchange up to US42,500 per tonne.</p> <p>The Shanghai Metals Market weekly average aluminium price also continued to rise sharply in the week ending August 25. The weekly average aluminium price gained by US$50.12 per tonne to stand at US$2,422.53 per tonne as on Friday, August 25. &nbsp;</p> <p style="text-align: center;"><img style="vertical-align: middle;" src="http://www.alcircle.com/uploads/images/aluminiumcapacity.jpg" alt="News" width="517" height="342" /></p> <p>China State Council has been supervising production safety checks across the country since August 7-18. The inspection teams have come up with suggestions for rectification for the polluting factories which will be the focus area for further inspection works to be conducted in September. &nbsp;</p> <p>SMM observed that there was a slight pickup in downstream purchase; yet, surplus existed in overall supply in east China aluminium market. Traders were found to be engaged in cautious buying.</p> <p><a title="AlCircle Report" href="http://www.alcircle.com/exclusivereport/?m=exclusivereport" target="_blank"><img style="vertical-align: middle; display: block; margin-left: auto; margin-right: auto;" src="http://www.alcircle.com/uploads/images/buynow.gif" alt="AlCircleReport" width="480" height="84" /></a></p> <p>As per SMM data, mainstream aluminium traded prices were 16,190-16,210 yuan per tonne in Shanghai, discounts ranged at 230-210 yuan per tonne over SHFE 1709 aluminium, prices in Wuxi were 16,180-16,200 yuan per tonne, and that in Hangzhou were 16,190-16,210 yuan per tonne.</p> <p>Industry experts see risk in aluminium price uptrend. They think that higher aluminium prices could encourage smelters outside of China to increase their production thereby capping further rises. However, China&rsquo;s supply side reforms seem to be currently working for the aluminium industry players.</p>