Press Metal likely to survive the supply glut effectively: say sources

Press Metal has not been having the best phase and the situation is threatening to get worse as China abolishes its export duty on non-alloyed and alloyed aluminium rods and bars starting next month.

The company however seems undeterred as a close source to the company says, “We should be okay. We are operating at full capacity.”

China’s overproduction and increased exports have already created a supply glut in the global aluminium market affecting the price of the metal. According to reports China has exported 43% more unwrought aluminium and aluminium products in the first quarter of this year amounting to 1.2 million tons.

Concerns are arising about the company’s future in the face of this global supply glut although sources believe that Press Metal will not be much affected by the new change. The company has been dealing with China’s oversupply tendencies for a long time. Since the company is able to produce aluminium efficiently, experts believe it will be able to withstand the additional pressure.

Press Metal’s greatest strength is its low cost of production which has kept the company out of danger even when the world struggles with the plummeting commodity prices. The source believes the glut is likely to hit those companies harder that have a high cost of operations.