Aluminium price undeterred by China capacity expansion in 2H 2016

The aluminium price outlook still looks bright in the first half of this year, not dimmed by growing aluminium capacity in China, SMM predicted at the recent 2016 Copper & Aluminium Summit in Shanghai.

China’s aluminium capacity will expand to 42 million-tpy in 2016 from 39 million-tpy in 2015, SMM aluminium analyst Liu Xiaolei said at the summit. The first half of the year will see no more than one million-tpy enter operations, though, with much of the additional capacity to come on stream in the second half of the year, Liu added.

Financial tightness at most smelters will be the one of the reasons behind slow capacity release, Liu explained. Banks are now very cautious towards lending to companies in aluminium-related industry against bad loans caused by a large number of aluminium smelters and processors last year.

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