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Markets

China's aluminium deficit seen widening to 1 mln T this year - Wood Mackenzie

SINGAPORE:* Recent supply disruptions in top aluminium maker China could widen the country's deficit to 1 million tonnes

Aug 23 2019

SINGAPORE:* Recent supply disruptions in top aluminium maker China could widen the country's deficit to 1 million tonnes this year from 600,000 tonnes estimated earlier - Consultant firm Wood Mackenzie.

* "August is shaping up to be a turbulent month for the Chinese aluminium market," said Wood Mackenzie's principal analyst, Ami Shivkar, referring to reports on capacity shutdown in Xinjiang and Shandong provinces earlier this month.

* "An additional 1.5 million-tonne offline for the next three to six months, coupled with another downgrade to global demand, will widen our 2019 China deficit estimate to 1 million tonnes and our global aluminium deficit to 1.4 million tonnes," Shivkar said.

* Wood Mackenzie said 1 million tonnes of capacity might have been affected by typhoon Lekima in the aluminium hub of Shandong and cited reports that another 500,000-tonne capacity has been cut in the province of Xinjiang.

* "The confirmation of another 1-million-tonne-per-annum of capacity out of the market could trigger the LME aluminium price to finally break through its narrow range of $1,750-$1,800/t," Shivkar said, referring to the Shandong production cut estimate.

Copyright Reuters, 2019