The Telegraph
Tin tack Recovery in aluminium prices cut short by China's increased output
Edited by : AL CIRCLE
1 min read
The recent tentative recovery in aluminium prices has stalled, as China increased its output of the lightweight metal.
Smelters that were shut down last year to meet the country's energy consumption targets in its five-year plan have now been restarted.
"Once again, Chinese aluminium producers have in one fell swoop managed to eradicate all the work done by other producers in cutting smelting capacity," said Nick Moore, a metals analyst at RBS.
Three-month aluminium futures in the fourth quarter of last year slumped below $2,000 (£1,260) a tonne, "a level at which more than 50pc of world aluminium smelting capacity became unsustainably cash negative", added Mr Moore.
Aluminium futures plunged to about $2,167 on Friday following the news from China.
According to data from the International Aluminium Institute (IAI), China's primary aluminium production averaged 53,400 tonnes a day in February, compared with 48,900 tonnes in January and 46,600 tonnes in February 2011.
Mr Moore noted that this was a daily output increase of 9.1pc, equivalent to an annualised production figure of 19.48m tonnes.
Analysts at RBS forecast spot aluminium prices will average $2,315 a tonne in 2012, a 4pc year-on-year fall.
Smelters that were shut down last year to meet the country's energy consumption targets in its five-year plan have now been restarted.
"Once again, Chinese aluminium producers have in one fell swoop managed to eradicate all the work done by other producers in cutting smelting capacity," said Nick Moore, a metals analyst at RBS.
Three-month aluminium futures in the fourth quarter of last year slumped below $2,000 (£1,260) a tonne, "a level at which more than 50pc of world aluminium smelting capacity became unsustainably cash negative", added Mr Moore.
Aluminium futures plunged to about $2,167 on Friday following the news from China.
According to data from the International Aluminium Institute (IAI), China's primary aluminium production averaged 53,400 tonnes a day in February, compared with 48,900 tonnes in January and 46,600 tonnes in February 2011.
Mr Moore noted that this was a daily output increase of 9.1pc, equivalent to an annualised production figure of 19.48m tonnes.
Analysts at RBS forecast spot aluminium prices will average $2,315 a tonne in 2012, a 4pc year-on-year fall.
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