Shanghai Nonferrous Metals News
SMM: The weighted average cash cost for domestic smelters was RMB11,709/t in March, indicating that 61.5% of domestic smelters are facing cash losses with reference to last Friday’s aluminium price of RMB11,590/t. A few domestic smelters began cutting operations in mid-March when prices started to fall. As of 3rd April, SMM estimates a total of 655 kt of primary aluminium capacity had been cut – a figure which has the potential to expand to 1.5 mln t in Q2 2020 and may even reach 2 mln t by end-2020 should cash losses worsen during the year.
On the demand side, it is expected that the 2020 growth rate of domestic aluminum consumption will be reduced to – 5% y-o-y from 2019, with a glut of aluminium supply during the year. According to SMM, domestic aluminium inventory at social warehouses was 1.68 mln t last Friday and the situation of high inventory levels is likely to continue longer than anticipated.