Strong Chinese aluminium production figures - Zinc recovery in demand

In line with the strong aluminium production figures from China, aluminium exports were also robust in August. Although they fell by around 17% compared to the previous month, they remained at a high level. Compared to the previous year, they were up 10%. This should significantly alleviate concerns about a tight supply situation due to production losses in Europe and put a lid on the aluminium price. However, as long as the risk of an expansion of heat-related production losses in China's Yunnan region, which is estimated to account for 1/8 of China's total aluminium production, persists, even a significant price decline seems unlikely in the short term.

The International Lead and Zinc Study Group has released its July figures. In the zinc market, a recovery in demand saw the market slip into deficit in July. Nevertheless, due to revisions in the previous months, the surplus for the first seven months of the current year as a whole was now reported at 83 thousand tonnes, higher than in the last report in August. Despite the oversupply in the first seven months, experts consider the zinc price to be well supported due to the production cuts in Europe. The association of non-ferrous producers, Eurometaux, had stated in a fire letter to the EU Commission von der Leyen that half of the zinc and aluminium industry in the EU was closed due to the energy crisis. The lead market showed a supply surplus of 25 thousand tonnes for January to July.

Source: Commerzbank Research, Photo: Fotolia