Singapore 28/07/2016 - China’s production of non-ferrous metals is likely to post slight growth this year but there remains outstanding problems in the industry in the second half, China’s Nonferrous Metals Industry Association (CNIA) said in a report this week.
China’s output of ten major non-ferrous metals rose 0.1 percent year-year to 25.12 million tonnes in the first half of last year.
“Production growth in the Chinese non-ferrous metal industry is stabilising in the year and the output of the ten major non-ferrous is likely to achieve a slight growth,” the association said.
Production in the industry was stable in the first-half with demand growth continuing in the copper and aluminium markets, it said.
But CNIA noted that difficulties faced by the industry have not shown obvious improvements.
It highlighted several issues that will continue to plague the industry in the second half – this include pressure on demand, uncertainty over factors influencing prices, high costs, difficulties in exporting, tight funds and difficulties for firms to get financing.
“Overall, the difficult situation in the non-ferrous industry has not changed for the better and development potential is still lacking,” it said.
After a strong first half driven by power grid investment in the country, some market participants expect Chinese copper metal demand in the second half to weaken as downstream consumption slows and this could put downward pressure on copper prices in the second half of the year.
In the domestic aluminium market, spot market supply remains tight while demand in the local automotive and construction sector is still supportive, sources said.
But there remains concern that production restarts and new capacity start-ups among the Chinese aluminium smelters will put downward pressure on domestic aluminium prices from the fourth quarter onwards.