Market overview- Aluminium Suppliers in China

Article Description : This article titled ‘Market overview -Aluminium suppliers in China’ covers important facts about the raw material that a professional must know before the commencement of supplier sourcing in China.

China is considered as a world leader in the Aluminium trade. It is the second largest economy of the world that contributes most metalworking products to the Global market. The diverse manufacturing sector defines China as the largest manufacturer of the world. Several sectors demand for different requirements from the manufacturing sector. In particular, the demand for Aluminium is caused by machining and infrastructure sectors of the country.

China has seen a growing trend of Aluminium trade for several years. Its import usually had been sustained by the demands created by the Government projects, while export demands were from the foreign trade alliances. More than 50% of the global consumption of Aluminium is made by China and the country leads in production as well. But the recent months have changed the market scenario of China due to several reasons causing a slowdown in trade.

Threats and downturn:

The foremost reason for the slowdown of the market is due to conflict between China and the US that has deterred several business sectors including the Aluminium market. Since China is a major contributor to the Global market, the effect of the downtrend is very evident in overall world trade. Apart from this, the current situation has caused severe hikes in the metal prices in the Chinese market. While an increase in both import and export was recorded at the start of this year, the trend started to decrease from around July. The statistical data mark the Aluminium trade in a downward fashion latest until September. As a result, there exists a severe threat to the domestic consumption of Aluminium products. Besides the conflicts, production outages in the main units due to heavy rains this year has resulted in a slugging market situation. Moreover, the Global slowdown add as another unsupported factor to the economic situation of the Aluminium market.

Balance and growth measures:

While the present situation has twisted the commercial sector in a crucial way, China has its own plan to balance the situation. Beijing has proposed a five-year infrastructure plan that has imposed the domestic demand for Aluminium in a very high spectrum. While this proposal was expected to be a lifesaver, another threat sprouted from this ideology. The unprecedented plan has culminated in the over-production of Aluminium. However, an austere requirement of Aluminium by the industrial giants has saved the situation for China. Exports are expected to increase balancing the market at its best.

Since exports to the United States is not possible recently, the focus has shifted to the European market. Abundance of Aluminium has been exported to the market due to a rise in the demand. But China is about to face yet another threat to this exportation. The European commission has warned the usage of carbonized Aluminium imported from China. The Aluminium produced by China contains almost 3 times higher carbon content than the products preferred by the European compliance. Experts warn that the usage of such highly carbonized aluminium could impose a ’slow death’ to the European market. While this compliance could hinder the export from the Chinese market, the intense demand for Aluminium however does not currently distract the trading activities.

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While these situations are cautionary, China is creating several demands to to bring back the market to a stable state. Opportunities are created across several business segments of the country. It is expected that China will bounce back to a steady position by various policies derived by the Government with the support of the private sectors. This is expected to boost the sourcing of Aluminium suppliers in China.

Resources:
Base Metals fall on weaker china export data -Reuters

Metals- Copper slips weak demand prospects- Dominate mood -Reuters

Aluminium production in China illustrates manufacturing slowdown – AG Metal Miner

Aluminium exports hit record- high copper imports rise – Reuters

Aluminium sector illustrates close link between trade and climate policy – Euractiv

Chinese dumping a slow death for European industry- Aluminium Boss – Euractiv

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