China's 3 Million Tons of Surplus Aluminum Seen Fueling ExportsBloomberg News
China is poised to ship out more aluminum, sustaining a global glut of the metal used in everything from cars to beer cans, as smelters ramp up output after price gains this year, according to Citigroup Inc.
“We expect the March uptrend in Chinese exports to continue” in the second quarter, Citigroup analysts including David Wilson said in an e-mailed note Tuesday. The country may produce 3 million tons more than it consumes this year, they wrote.
China’s shipments of unwrought aluminum and products jumped 50 percent in March from a month earlier to 420,000 tons, the highest level this year. That’s partly because smelters are firing up plants after prices rallied more than 20 percent from a multi-year low in November. Private companies including China Hongqiao Group Ltd., the world’s biggest producer, are also adding capacity.
The country exported record amounts of industrial products including steel, aluminum and diesel last year, boosting surpluses that hurt rival producers globally. The world may be battling a oversupply of aluminum until 2019, Citigroup said, with inventory held in official exchange warehouses and elsewhere totaling as much as 16 million tons.
— With assistance by Martin Ritchie