November 21, 2022

China’s aluminum product exports could increase by nearly 40% over the coming years. The country’s largest aluminum producers will study plans to jointly build alumina plants in Guinea and new factories and fabricators in Southeast Asia, according to Bloomberg. The companies involved, which include Aluminum Corp. of China Co. and Shandong Weiqiao Pioneering Group Co., believe that these additions could boost the country’s aluminum product exports to 10 million mt. Researcher Antaike estimates that China’s aluminum product exports will total 6.3 million mt this year, up 16% from 2021. The companies also plan to improve domestic mining to increase bauxite reserves. These company statements were initially published in the China Nonferrous Metals Industry Association’s newsletter mid-last week. (Source: Bloomberg)

The companies did not give a timeline on how long it will take to implement their plans. However, China’s aluminum exports are already on the rise, which could handicap prices. Aluminum producers that are concerned about decreasing prices could consider selling swaps or buying put options. Such positions are standard for producer hedging; however, they can result in opportunity costs or cash costs if metal prices increase. Please contact AEGIS for specific strategies that fit your operations. (11/21/2022)

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Price Indications

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AEGIS Insights

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11/16/2022: AEGIS Factor Matrices: Most important variables affecting metals prices

11/07/2022: AEGIS Primer on LME Aluminum Price History

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11/11/2022: LME will not ban Russian metal from its system

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