Chinese steel and aluminum production at record high
by David Fleschen
Yesterday a corrective movement could be observed on the metal markets. Copper fell the most - by 2.7% to around USD 6,250 per tonne. This was the biggest daily loss since April. In the view of experts, the correction was overdue and would have to go much further for the price to reflect more of the fundamental situation in the copper market. US Trade Representative Lighthizer has already expressed "satisfaction" with the implementation by China. This may be one of the reasons why copper & Co. are already recovering this morning, although China has only reported mixed economic data: According to data from the National Bureau of Statistics (NBS), industrial production in July rose by 4.8% year-on-year, less than expected. Fixed capital formation continued to decline. The data suggest that the growth momentum of the Chinese economy has weakened.
By contrast, China continued to put full steam ahead in steel production. According to NBS data, this rose to a record high of 93.4 million tonnes in July. It was the third month in a row that more than 90 million tons of steel were produced. On a daily basis, the record level of June was only just missed. Chinese steel mills are clearly on track to break through the 1 billion tonne mark for the first time this year. Chinese aluminium production also reached a record high of 3.1 million tonnes in July. In our opinion, China is producing well above demand. According to estimates by the Antaike state research institute, China alone is likely to have a surplus of 1.4 million tonnes of aluminium this year.
Source: Commerzbank Research, Photo: Fotolia