China domestic aluminium alloy prices flat for third week

China's domestic ADC12 aluminium alloy prices stayed flat at Yuan
17,000-17,500/mt ex-works Tuesday, unchanged for the third week since October
19 in thin trades, market sources said.

     Sigma Metals kept its domestic offers steady at Yuan 17,900/mt
($2,679/mt) ex-work this week, while domestic non-Sigma offers were mostly at
Yuan 17,500-17,700/mt, compared with Yuan 17,800-18,000/mt the previous
week.

     Sources noted that Chinese domestic aluminium prices slipped, while the
London Metal Exchange prices appeared to have firmed, causing buyers to be
cautious.

     "Chinese aluminium prices (in general) are generally moving sideways amid
a poor global economic outlook while LME prices are firming up on a weaker US
dollar," a Chinese producer said.

     Another Chinese producer agreed.

     "The US dollar remains weak and all eyes are on the outcome of an
upcoming US Federal Reserve policy meeting this week," the second Chinese
producer said.

     China's domestic spot aluminium price was around Yuan 16,140/mt Tuesday,
down from Yuan 16,320/mt a week ago, while the LME official cash price was
$2,369/mt Monday compared with $2,362/mt last week.

     Meanwhile, China's car output for October remained strong, producing
13,390,971 vehicles for the Jan-Sept period, up 36.2% year on year, and
1,636,330 units in September, up 19.2% year on year and up 23% month on month.

     Taking advantage of the weaker US dollar, some Chinese were importing
from Thailand and the US, at levels around $2,400-2,500/mt CFR, according to
several Asian traders.

     China levies a 7% tax on aluminium alloy imports, but imports may be cost
competitive depending on the exchange rate and domestic prices.

     But there are also concerns that China may be oversupplied with cars and
China's demand for cars may be slowing in the near future, said one Japanese
diecaster.

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