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Mainland China's aluminum output remains strong, meaning the market is still not getting the supply cuts necessary to start whittling down ample global supplies, said Barclays Capital in an assessment of a report on C..

19 Nov 2012

BEIJING (Commodity Online): Mainland China's aluminum output remains strong, meaning the market is still not getting the supply cuts necessary to start whittling down ample global supplies, said Barclays Capital in an assessment of a report on Chinese base metal output in October.

According to the British bank, copper and lead production hit record highs, while zinc production rebounded. Aluminum output, meanwhile, rose 20% year-on-year, partly in comparison to a weak base.

"There is thus little indication of the smelter cuts we believe are needed to restore balance to the market," the bank added.

"Government intervention, whether via power subsidies or stockpiling, is keeping loss-making smelters open and exacerbating the surplus. Semis production surged 24% y/y and the year-to-date rate picked up to 15%, which in our view suggests there may have been a build-up in semis inventory," Barclays concluded.


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