China Estimates Domestic Aluminium Demand to Increase by 6 Percent in 2018

According to numbers released by the state, the People’s Republic of China will see a 6-percent rise in refined aluminium demand in 2018, rising from this year’s estimated demand of 34.8 million metric tons to 36.9 million metric tons.

Beijing Antaike Information Co., Ltd (Antaike) indicated in its report that demand from aluminum alloy wall, aluminum bridge, and solar aluminum extrusion sectors have propelled demand recently, more than making up for a drop-off in demand from the construction, transport, electronics, and power sectors.

According to Antaike’s numbers, domestic supply was sufficient to meet demand. Their numbers show a domestic aluminium supply of 18.59 million metric tons per annum through the first half of 2017, a rise of 19.8 percent year on year. Demand over that period was 17.5 million metric tons, an increase of 9.6 percent. Overall, the first half of the year saw China’s domestic aluminium industry with a surplus of 1.1 million metric tons, a reversal year-on-year from last year’s first-half deficit of 440 thousand metric tons.

Refined aluminium will hold steady at 30 thousand metric tons, according to the report. However, Antaike forecasts an increase in new, low-cost aluminium smelting capacity in the coming year, which the firm believes will eventually lead to an increase of domestic downstream aluminium operations.

Antaike estimates that the shuttering of high-cost aluminium capacity will team up with the slowing rate of domestic economic growth to put the brakes on domestic aluminium demand. Aluminium production growth will slow to 5.6 percent next year according to their forecast, topping out at a total of 38 million metric tons.

Antaike’s forecast for primary aluminium smelting capacity in the coming year to be below market expectations, saying that 7 million metric tons per annum of capacity was likely to be added in 2017-2018. All in, the agency predicts that China will have a smelting capacity of 47 million metric tons per annum by the end of next year.

Although many market watchers have cast doubt upon the veracity of such claims, Antaike cites Beijing’s promises to reign in illegal and polluting capacity as a rationale for the relatively low net increase in capacity over the coming months.

1 Comment

  • Paul Adkins says:

    Their own words show them up for the paucity of credibility i their numbers.

    Their own parent company, the CNIA, says that the first half of the year produced only 16.7m tons of primary metal, almost 2 million tons lower than what Antaike reportedly says. Of course, we all know that the CNIA numbers are manipulated, so now we know what the real number is. But you would think they would stick to the play book.

    Second, they maintain that a cut to high cost smelting will reduce demand. Hang on, how does a change in supply affect demand, exactly? And besides, let’s have a list of all the high cost supply that’s gone? Hongqiao? Xinfa? East Hope? The only “high cost” capacity that’s exited is Jiarun, but it was only high cost relative to the money in their bank account.

    They say that 7 million tons will be added in 2017-18? China will 3.8 million tons this year, and there’s another 5 million tons due for construction completion in 2018. So the real number is pushing 9 million, not 7.

    They are paid by the government, there’s no excuse for blatant inaccuracy.

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