Why Does China Aluminum Exports Increase
Posted: 2014-10-29 04:59:18 Hits: 2236
It is recently heard from foreign news agency that China's aluminum exports increased to the highest level over three years. At the same time, steel exports increased by 26% on the same period last year because of the excess domestic supply and the improved international demand.
According to data released by General Administration of Customs, China exported 390,000 metric tons aluminum and 7.76 million tons steel in August.
Aluminum exports increased by 22% from the same period a year earlier, which has reached the highest level since July 2011.
The reasons of increased exports are that the domestic price is still lower than the overseas price and the domestic production excesses the demand at the same time.
The decreasing Chinese consumption is because of the fact that development of manufacturing industry in August becomes slow for the first time over six months and the real estate sales become soft.
IanRoper, CLSALtd. Analysts said: "China's domestic steel and aluminum market still remains subdued and the supply still excesses, while the demand of the rest of the world is more stable. As long as there is price interest arbitrage, China will become a clumsy factor of the price recovery of global commodities."
According to the data from MetalBulletin, future price of China’s aluminum has been lower than the global benchmark price - lme price since June 20.
IvanSzpakowski, analyst in Citigroup said that export interest arbitrage after adjusting premium recorded the highest since 2011.
Shanghai rebar future price on September 5 hit the lowest point of 2838 yuan ($462) per ton.
SanfordC. Bernstein&Co said China iron and steel industry overcapacity was at least 200 million tons.
China's real estate industry was still under pressure because the sales reduced 8.2% on the same period last year from January to July. In July, there were 64 cities’ housing prices declining among 70 cities the government is monitoring all the time, which was the highest number since January of 2011.