China Metals Report 2016
BMI View: China's metals industry will face headwinds from both low metal prices and Beijing's pledge toslash overcapacity in heavy industry, which will threaten the survival of many high-cost metal producers.
China will continue to drive the supply glut in both the global steel and aluminium market. This willtranslate into elevated exports from the country over the coming quarters.
We have revised down our average aluminium price forecast for 2016 to USD1,575/tonne. Althoughprices will bottom in Q415-Q216, production will outstrip consumption until 2018 and anchor prices. Inparticular, cheap Chinese exports will keep the market well supplied.
Chinese production has remained robust in 2015, driven by expansion in the North-West of the country.
Primary output grew by 15.2% in the first nine months of the year, according to Bloomberg. We expectthis growth to slow substantially in the coming quarters and forecast output to grow by 8.0% in 2016,
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