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China’s Impetus to Revive Aluminium Industry

Friday, Jul 26, 2019

  Kalkine Media reported that primary aluminium prices are moving up in the international market, with the prices of Aluminium Futures on the London Metal Exchange rising from the level of USD 1728.75 (Day’s low on 14th June 2019) to the present high of USD 1855.75 (as on 19th July 03:30 PM AEST). The uprise in the prices witnessed a growth of more than 7% in just a few trading sessions. The prices of LME Aluminium settled at USD 1,827 a tonne on 18th July 2019, up by 5.48% in just one month. Factor which is supporting the aluminium prices in the international market is the China’s push on the infrastructure and its monetary stimulus, and over the high demand in China, the global investors are turning their eyes on world’s top alumina exporter-Australia.

  Australia is the world’s top alumina exporter and Bauxite producer, with the key markets of China, United States, Germany under its supply chain. The primary aluminium prices are forecasted by many independent analysts and experts to witness robust growth in the years ahead.
  The Australian Department of Industry, Innovation and Science anticipates thealuminium prices to average around USD 1,880 a tonne is 2019 prior to reaching an average of USD 2,015 a tonne by 2021.
  China underpinned lower volumes growth previously amid the escalated US-China trade war and a high tariff on aluminium trades, which in turn, exerted pressure on aluminium prices earlier in the international market.
  However, China is now pushing the infrastructure growth while providing monetary and Fiscal stimulus for growth, which in turn, is again pulling up the aluminium demand in the market and supporting the prices.
  Over the current price scenario, the Australian DIIS estimates that the LME aluminium spot would witness a growth of 4.7% to average at USD 1,967 a tonne in 2020 and further by 2.5% in 2021. However, the DIIS anticipates Australianalumina (FOB) prices to fall and average at USD 364 a tonne by 2020, and further by 0.3% at USD 363 a tonne in 2021 amid global supply growth.
  The DIIS further forecast that the annual output for aluminium would remain at 1.6 million tonnes amid no expansion in the smelter and the yearly production of alumina would stay at 20 million tonnes amid no addition to refinery capacity.
  The total Australian export value of aluminium, alumina and bauxite is forecasted to peak in 2018-2019 to the level of USD 16 billion before marginally declining to USD 14 billion in 2020-2021.

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