China is contemplating the sale of around 500,000mt of primary aluminum held in its state reserves to cool down pricing and replace the temporarily lost capacities.
According to media reports, the country is mulling the move to restrict prices in Shanghai from moving above the decade-high levels reached earlier this month due to cutbacks in coal-powered aluminum production at its Inner Mongolia hub in line with China’s green initiatives.
Aluminum is the second most widely used industrial metal after steel and is consumed by various sectors. Increasing prices could boost inflation rates in the country. Reports suggest that China made the same move in 2010 to battle tight supply due to energy-saving goals being implemented across the country.
China is moving toward carbon-free aluminum production by 2060 and is not issuing operating permits to new carbon-intensive projects. Roy Harvey, chief executive officer at Alcoa, believes that this transition may trigger a major shift towards low-carbon aluminum globally since China produces more than half of the global aluminum supply.