Aluminium output from producers in the People’s Republic of China hit record highs last month, according to numbers released by the government. Experts believe the jump in production is the result of producers chasing rising prices resulting in the government’s reigning in of illicit smelting capacity.
Numbers released by the National Statistics Bureau yesterday showed a 7.4 percent increase year-on-year to a output of 2.93 million metric tons in June. Last month’s total bested December’s then-record output of 2.89 million metric tons.
Although the United States, and especially the Trump administration, has continuously advanced the notion that official measures must be taken to stem the tide of cheap aluminium from China rolling over the U.S.’s own smelting industry, experts caution that an increase in production alone should not be viewed as provocative.
“It’s wrong to think that this is some sort of unified, homogenous voice that is deliberately making some provocative statement to the U.S,” said AZ China’s Paul Adkins in an interview with Reuters.
“That couldn’t be further from the truth. What we’re really seeing, if anything, is … a lack of a coordinated response (from Chinese producers).”
According to analysts, the jump in production is simply a reaction to cuts in capacity implemented by Beijing previously this year.
“The reason that prices were higher in the first place was the expectation of Chinese cutting back supply of aluminum and steel, yet that is what is inducing its high utilization rates,” said AME Group’s chief economist Mark Pervan.
In the meantime, producers in both countries await the results of talks between representatives of both governments, which are being carried out in the shadow of the United States Commerce Department’s ongoing investigation into Chinese dumping and its possible ramifications upon national security.