China might hold a large slice of the world’s aluminum pie, serving as the metal’s largest producer and consumer on the international market, but China’s control is starting to hurt the market. Recent troubles in the worldwide economy have plagued aluminum more than any other metal, and a recent aluminumÃ‚Â stimulus package” in China won’t help the market as much as planned.
To fight the current fire in the nonferrous metals industry, China’s State Reserve Bureau plans to purchase 290,000 metric tons of aluminum bought at 10-percent premium prices from Chinese smelters. The announcement first created three-week highs, which Stuart reported when Shanghai futures rose .5 percent, but theÃ‚Â industry finally dropped out when futures fell last week.
“We feel the buying is too small to ease the domestic surplus,” Bloomberg.com quoted commodities analyst Eric Zhang. Further, the site reported, the aluminum surplus in China “may outpace demand by 500,000 tons next year even after the country idles a fifth of its production capacity by the end of this year.”
As the year winds down, the aluminum market dropped 36 percent from last year, with aluminum falling 1.5 percent on December 24 to reach $1,537. A recent report from Interfax China highlights the ups and downs inÃ‚Â China’s busyÃ‚Â metals industry.