Supply side reform leads speculative capital flows into aluminium Market
A problem created by China as a source is being solved from the source. China, the world's largest aluminium producer, is trying to solve the oversupply problem by closing its factories, according to Wood Mackenzie, which also helps the government to implement environmental protection measures.
"We don't think China can avoid environmental problems, but as far as the aluminum industry is concerned, China will change from a villain to a hero," Julian Kettle, vice president of metals and mining research, told singapore". Headquartered in Guildford Kettle said on Monday: "Chinese government is well aware of the pollution problem of Chinese. If you follow the government's rules, you will have the opportunity to restore the market to long-term sustainability."
Citigroup (Citigroup Inc.) said that as a manufacturer of global supply of more than half of the China has long been considered a target for all global manufacturing overcapacity. When China renewed its push to cut capacity and strengthen environmental management measures, this led to tight supplies and led to a surge in aluminium, which has become the best performing base metal this year.
The London Metal Exchange earlier this month, aluminum futures rose to $2122.50 a tonne in three months, the highest level since February 2013, quoting $2084 on Tuesday. Aluminium is the largest of the six major metals this year, up 23%, more than copper and zinc.
China is shutting down unauthorized aluminium production, at about 4 million tons a year. According to Citibank, the government has also ordered restrictions on winter supplies, thereby reducing pollution by up to 1 million tons a year. (Note: in 2016, the output of aluminum in China was 31 million 900 thousand tons)
In addition to foreign investors, this reform has caused the attention of domestic speculators, the Shanghai futures exchange prices pushed to the highest level in nearly 6 years, the trading volume in August than in November hit a monthly record.
Wilson, chairman of WoodMac (Richard) also said: "at present, there are a lot of retail funds into the market."."