Rusal predicts that Chinese aluminium oversupply might end soon

Rusal, the world’s largest aluminium company, predicts that China’s overproducing trend in aluminium may finally come to an end.

China saw a boom in exports by 49% in the first quarter but because the price arbitrage has become a lot less attractive, the exports are likely to fall soon according experts like Rusal and commodities correspondent Henry Sanderson.

The constant flow of aluminium from China has been a point of concern for aluminium producers across the world. China has been shipping out aluminium thinly veiled as semi-fabricated aluminium products and receiving tax rebate from the government while the products are remelted and used as primary aluminium outside the country.

Rusal along with its results has also reported a steady fall in China’s semi-fabricated aluminium from 480,000 tons in December to 391,302 tons in February and 298,926 tons in March.

Although the Chinese government has removed the 15% export tariff on aluminium bar and rod, it is not backed by VAT refund and the aluminium giant predicts that it will not be a significant source of export in future for the country.