LME Asia Week starts today, May 7, 2019, at Hong Kong with industry experts discussing metals

LME Asia Week is staring today, May 7, 2019, at Hong Kong with over 2,000 metals professionals and media converging together. The week will see industry experts discussing a number of topics around precious, base and ferrous metals.  

Ian Roper, general manager of SMM Singapore said during LME Asia Week in Hong Kong that supply side reforms in China have not benefitted the aluminium and lead sector.

“Supply side reforms have not really restricted Chinese supply of aluminium,” Roper said.

He said that despite supply reforms aluminium capacity in China continues to grow in excess and about 2.9 million tonnes of capacity would come online in 2019. Production in 2018 dropped for the first time in 20 years but the entire loss will be offset by new capacity, he added. Most of the new capacity to come online in 2019 was actually deferred in 2018 by producers due to low margin.

Roper identified the agility of Chinese smelters in responding to low margins. “It’s positive that Chinese smelters are quick to respond when margins are down but struggle to bring production back online when margins improve.”

Roper is of the view that the domestic alumina market will remain tight because of shortage of domestic bauxite supply. Environmental crackdown has caused restrictions in bauxite mining in China, which is likely to grow demand for imported alumina.

With LME Asia Week is also likely to discuss how aluminium premiums in Japan and South Korea would likely to move during the rest of the year.