Commerzbank analyst Norman Liebke has highlighted that China's July trade data will be a crucial indicator for base metals, with a particular focus on aluminium. According to Liebke, Chinese aluminium production in the first half of the year reached an annualized output of just under 46.4 million tons, which is significantly above the government-imposed cap of 45 million tons. This overproduction suggests that aluminium output in China could decrease in the second half of the year as producers adjust to comply with official limits [1].
The bank also points to a renewed increase in energy prices and persistently low inventory levels on the London Metal Exchange (LME) as additional factors supporting a bullish outlook for aluminium prices. Commerzbank expects these combined elements—potentially lower Chinese production, higher energy costs, and tight LME stocks—to drive aluminium prices higher over the coming months [1].
The upcoming Chinese trade data is anticipated to provide further insights into trends in both aluminium and copper production, which could influence market expectations and price movements for these base metals [1].
CONCLUSION
Commerzbank anticipates upward pressure on aluminium prices due to Chinese production exceeding official caps, rising energy costs, and low LME inventories. The market is expected to closely watch upcoming Chinese trade data for further direction on base metals.