Oversupply of China aluminium market

According to report of Citigroup, there is currently no favorable news of Chinese aluminium market from the aspects of manufacturers and consumers.

Citigroup predicted China¡¯s aluminium storage to be 1200000 tons, including 200000 tons in Shanghai Futures Exchange; it noted that most of the constantly increasing storage is not in the Exchange.

"China¡¯s storage of aluminium has been doubled over the past six months as a lack of orders coming in caused by closing down of manufacturers and hard financing policy.¡± Said the investment bank.

Besides, smelters are still producing for the low cost of electric power and alumina. Some 4000000 tons of capacity are spared or suspended.

By 0510 GMT, LME 3-month futures aluminium was quoted at 1731 dollars, down 1 dollars than previous.

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