International aluminum prices fell, worried by the supply of excess pressure

Author : Date : 10/24/2016 1:32:14 AM

Thursday (October 20) international aluminum prices fell to nearly a month low, because the data show that China's aluminum production increased, a substantial increase in Asian warehouse inventories, a worrying oversupply.

International Aluminum Association data show that in September China's aluminum production climbed to 15 months up to 275 million tons in September, the global average daily primary aluminum production hit a record high.

The London Metal Exchange (LME) reported that the Asian warehouse aluminum inventories increased by 7.7075 million tons in two days, mostly in South Korea.

LME aluminum index fell 1.2 percent to close at 1,612 US dollars, the lowest since September 22.

"There is some concern about the oversupply of Chinese production data," said Gianclaudio Torlizzi, a partner at T-Commodity. "The rise in aluminum prices, especially in Shanghai, is a big incentive for smelters to resume production."

Paul Adkins, managing director of AZ-China, a Beijing-based consultancy, said China had 1.8 million tons of capacity to resume production so far this year.

"In addition to restoring capacity, the new capacity in China this year is 2.9 million tons, and according to our records, there will be 1.3 million tons of new capacity to enter the market," Adkins told Reuters Global Base Metals Forum.

The dollar index hit a seven-month high on Thursday, also weighing the dollar-denominated base metals.

Guangzhou will strengthen the regulation of the real estate market irregularities, while Wuhan real estate developers will be subject to more stringent supervision.

"In the short term, the market is still worried about the negative impact of the property market cooling measures," Argonaut Securities' Helen Lau said in a report.

LME copper fell 0.4 percent to close at $ 4,652, still higher than the one-month low of $ 4,623.25 hit on Friday.

Zinc fell 0.9 percent to $ 2,287. Nickel slid 1.8 percent to $ 10,130. Lead did not follow the decline in base metals, rose 0.9 percent to close at $ 2,014. Tin fell 0.5 percent to close at $ 19,825.