China’s Aluminum Exports Data Could Help Alcoa



China’s aluminum exports data

Previously, we looked at China’s copper imports in August. In this part, we’ll look at China’s aluminum exports. China exported 410,000 metric tons of unwrought aluminum in August—compared to 440,000 metric tons in July. China’s aluminum exports in August were similar to the same month last year. Previously, the country’s aluminum exports rose year-over-year for four consecutive months—including a double-digit yearly rise in June and July. In the first eight months of 2017, China’s aluminum exports were 3.26 million metric tons—5.8% higher than the same period the previous year.

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Aluminum prices have seen a spectacular rally this year. Based on the closing prices on September 8, aluminum has risen 23.7% this year. Aluminum producers including Alcoa (AA) and Century Aluminum (CENX) have also risen amid strengthening aluminum prices (NHYDY) (RIO). Aluminum prices are rising due to hopes of winter curtailments in China. Other factors including the weaker US dollar and positive market sentiments are also supporting aluminum prices. However, if we don’t see cutbacks in China’s aluminum production in 4Q17, we could see aluminum prices react negatively.


Unlike copper (XME), which is expected to be in a deficit by the end of the decade, there’s chronic overcapacity in the aluminum industry. If aluminum prices show stability around the current price levels, some of the idled smelters might come back online. Alcoa is looking to partially restart its Warrick smelter.

Positive market sentiments are supporting aluminum prices. However, aluminum might need support from China to sustain its 2017 gains.

In the next part, we’ll look at China’s steel exports in August.


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