Domestic Car Sales Production Of China Still Robust, Aluminium Trades Lower

Demand for cars in China has not been meeting the rising supplies as per the latest report from China Automotive Technology and Research Center. The report released on Tuesday showed that the first half of 2010 production registered a rise of 44%. 

The total production for the first six months was 8472200 vehicles. Terminal sales stood at 7185300, rising 30.45% in Jan-June 2010. 

Zhao Hang, Director, China Automotive and Research Center said that the car sales for the three consecutive months marked declines. Car inventory cycle also increased from 41 days to 55 days, this is impacting the cash flow of auto companies and distributors in China. 

In June, the domestic sales of cars stood at 1.132 million, which is an increase of 13.9%. China is the world number one when compared to car production and domestic sales volume. 

The rise of car production is positive for Aluminium, but as said in the report the overall inventory cycle is increasing and the demand from the end user is expected to shrink making Aluminium trade with lackluster sentiments. 

On Tuesday, LME Aluminium prices increased as the markets took positive cues from easing tensions in Europe. Aluminium three-month forwards contract was at $ 1967.5 per tonne, testing a one-week high. 

On MCX, the prices are sideways to negative in today's trade. MCX Aluminium benchmark contract for July expiry is trading at Rs 92.45 per kg, down 0.27%.

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