North China to continue witnessing slow trades of aluminium ingots in the medium term: SMM

Shanghai Metals Market believes aluminium ingots trades are likely to continue at a slow pace across the northern Chinese markets in the medium term. The current adequate supplies of aluminium ingots, the prospect of poorer downstream consumption in a slow season of July-August, and new aluminium capacity are some of the reasons for the estimated slow ingots trades.

As more cargoes arrived and downstream producers cut production in a slow season, transactions of aluminium ingot across markets in the north, such as Shandong, Henan, and Tianjin, weakened considerably from the previous month, found Shanghai Metals Market survey on July 4.

Aluminium ingots sold in the north-eastern Chinese markets are mainly supplied by smelters in Inner Mongolia. SMM learned that some new, recovered capacities would expectedly start in Inner Mongolia, Shanxi, Shandong areas in the third quarter, which will further expand the supply of aluminium ingots in the north.

A large aluminium processing mill in the north-east told SMM that it sold its stockpiles of aluminium ingots after fewer orders slowed its operating areas. This reinforced worries about a supply glut in the market.

Preferential freight charges from Xinjiang, a major production area of aluminium, to Zhengzhou of Henan province is one of the reasons for greater arrivals in the north.