Analysts and trade sources said on Monday that China's primary aluminum inventories may increase further in March, and stocks have soared 43% so far this year.
China's aluminum inventories are expected to be close to 2 million tons, the highest level since August last year. Guangdong Province is close to 500,000 tons.
YuYe, an analyst at Minmetals Futures, said, “The upward trend in stocks is already very clear. Inventories may not decline until demand increases in April or May.â€
She added that the estimate was based on factors that companies typically increase production during the April-May period.
The inventory estimate, including the aluminum stocks of the Shanghai Futures Exchange, is basically expected by traders and analysts, and is expected to be around 1.4 million tons in early January. The Chinese government does not publish the data.
Many aluminum smelters have restarted idle and new capacity this month as the smelter's power supply begins to recover.
Electricity supply declined between December last year and January this year, forcing smelters in major producing areas such as Henan and Guizhou to shut down more than 1 million tons of capacity.
Traders said that stronger prices encouraged smelters to increase production.
LME three-month aluminum prices climbed 11% in 2010, and at $0837GMT on Monday, it was $2,567.5 per ton, and so far this year has reached 4%.
The aluminum price of the Shanghai Futures Exchange has climbed nearly 2% this year and reached 17,115 yuan per ton on Monday.
Most Chinese companies suspended production during the period from late January to mid-February, reducing aluminum consumption.
Trade and corporate sources said aluminum inventories could more than double to nearly 500,000 tons this year in Nanhai, China's main aluminum-consuming region.
In the past years, the inventory of Nanhai City will increase after the holiday. But this year's increase is even greater, due to weak corporate demand.
Most of the aluminum products processing enterprises in the South China Sea are still operating below capacity, as some workers have not returned.
The person in charge of a company in Nanhai said that at present, companies are not eager to purchase primary aluminum, fearing that the government may further tighten credit and strengthen the tightening policy of the real estate market. This will lower the domestic aluminum price.
China's aluminum inventories are expected to be close to 2 million tons, the highest level since August last year. Guangdong Province is close to 500,000 tons.
YuYe, an analyst at Minmetals Futures, said, “The upward trend in stocks is already very clear. Inventories may not decline until demand increases in April or May.â€
She added that the estimate was based on factors that companies typically increase production during the April-May period.
The inventory estimate, including the aluminum stocks of the Shanghai Futures Exchange, is basically expected by traders and analysts, and is expected to be around 1.4 million tons in early January. The Chinese government does not publish the data.
Many aluminum smelters have restarted idle and new capacity this month as the smelter's power supply begins to recover.
Electricity supply declined between December last year and January this year, forcing smelters in major producing areas such as Henan and Guizhou to shut down more than 1 million tons of capacity.
Traders said that stronger prices encouraged smelters to increase production.
LME three-month aluminum prices climbed 11% in 2010, and at $0837GMT on Monday, it was $2,567.5 per ton, and so far this year has reached 4%.
The aluminum price of the Shanghai Futures Exchange has climbed nearly 2% this year and reached 17,115 yuan per ton on Monday.
Most Chinese companies suspended production during the period from late January to mid-February, reducing aluminum consumption.
Trade and corporate sources said aluminum inventories could more than double to nearly 500,000 tons this year in Nanhai, China's main aluminum-consuming region.
In the past years, the inventory of Nanhai City will increase after the holiday. But this year's increase is even greater, due to weak corporate demand.
Most of the aluminum products processing enterprises in the South China Sea are still operating below capacity, as some workers have not returned.
The person in charge of a company in Nanhai said that at present, companies are not eager to purchase primary aluminum, fearing that the government may further tighten credit and strengthen the tightening policy of the real estate market. This will lower the domestic aluminum price.
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