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Aluminium Inventory in China Jumps by 472KT

Metal News - Published on Thu, 20 Feb 2020

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SMM reported that inventories of primary aluminium ingots in China are expected to reach a peak of 1.5 million tonnes, as downstream consumption slowly recovers and deliveries continue to arrive. SMM data showed that inventories were 1.16 million tonnes as of February 17, up 472,000 tonnes from January 23. Most of social warehouses saw only inflows during the CNY holiday and two weeks after CNY, as delayed resumption of downstream consumers in most part of China, road transport restrictions and suspension of outbound business at some of the warehouses muted outflows from social warehouses.

Deliveries of aluminium ingots to social warehouses are likely to expand, growing inventory pressure, as smelters have stepped up production of ingots after delayed resumption of aluminium billet and rod producers reduced consumption of molten aluminium. Output of aluminium ingots was higher than the same period last year, which has lifted ingot inventories at smelters amid road transport restrictions.

Currently inventories of finished goods at aluminium processors remain at high levels, as logistics issues forced plants to delay the delivery of most of the orders. Their clients have slowed down on cargo orders, as end-users have yet to recover operations. Finished goods inventories at aluminium processors in March are likely to decline from February, as plants will rush to deplete their stocks to fulfill backlogged orders and ease cash flow pressure in late February and early March, following the gradual recovery of businesses across the industry and easing of logistical constraints.

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Posted By : Rabi Wangkhem on Thu, 20 Feb 2020
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