Antaike Forecasts 6% Jump in Chinese Domestic Aluminum Demand

BEIJING (Scrap Monster): The latest report released by the Beijing Antaike Information Co., Ltd (Antaike) - the leading metals information provider, predicts significant jump in domestic aluminum demand in the country in 2018. According to the state agency report, the country’s refined aluminum demand is projected to witness 6% growth to 36.9 million mt from current year’s level. Antaike had earlier predicted the domestic aluminum demand for 2017 at 34.8 million mt.

The Antaike report notes that decline in demand from the construction, transport, electronics and power sectors has been more than offset by increased demand from alloy wall, bridge and solar aluminum extrusion sectors.

The Chinese domestic aluminum supply has surged higher by nearly 20% during the initial six-month period of the current year. The supply has totaled 18.59 million metric tons during this period, significantly higher when compared with the supply of 15.49 million metric tons during the corresponding half-yearly period in 2016. This supply was more than sufficient to meet the demand, Antaike says. The demand totaled only 17.5 million metric tons during Jan-June ’17, rising by nearly 10% over the previous year. The net aluminum market ended in a marginal surplus of 1.09 million metric tons. It must be noted that the domestic aluminum industry in China had reported trivial deficit of 440,000 metric tons during the first half of 2016.

Antaike report forecasts marginal rise in new, low-cost aluminum smelting capacity in 2018. This will eventually lead to increased output of domestic refined aluminum. At the same time, domestic aluminum demand growth will be capped, mainly on account of shutdown of high-cost and polluting smelters, in line with Chinese government policy. The anticipated slowdown in country’s economic growth may also lead to modest decline in domestic demand for aluminum. Meantime, domestic aluminum production is expected to witness 5.6% growth in 2018. The country’s aluminum smelting capacity is likely to total around 47 million mt per year by end of 2018, says Antaike report.

The most recent statistics published by the World Bureau of Metal Statistics (WBMS) signals further widening of primary aluminum market deficit during the initial seven-month period ending July this year. China led the world in aluminum production during this period, with an output of 19,531 kt during this period. The country had accounted for more than 56% share of total global aluminum production during this period.