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Aluminium likely to trade under pressure in 2019

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LONDON (Scrap Register): Aluminium is expected to trade under pressure in 2019, remaining range bound at 13,500-14,500 yuan/mt as supply growth accelerates and demand remains under pressure, according to Shanghai Metals Market.

Unexpected disruptions to global supply and short supplies of raw materials in China supported aluminium prices in 2018. However newly-commissioned or resumed alumina capacity is expected to amount to 3.8 million mt domestically and 5.85 million mt overseas in 2019.

This would lift overall alumina capacity in China and overseas 4.6% from 2018, respectively. Most of such capacity is expected to come onstream in the first half of 2019 and this will lower total costs for primary aluminium.

In Nov. and Dec., about 0.79 million mt of primary aluminium capacity is expected to be commissioned, accounting for 1.9% of new primary aluminium capacity in China 2018. In 2019, primary aluminium capacity is expected to grow by 2.99 million mt in China.

The year-over-year expansion came in at 6.7% for the domestic market, 0.2 percentage points slower than 2018. We see global aluminium prices remaining under pressure from thisnew capacity overhang throughout 2019.

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