Chinese production and the overhang of stocks in London Metal Exchange warehouses and off-market will prevent the price from rising during the period, and lower premiums will hurt margins for producers, the company said in its latest quarterly report.
Exports from China rose markedly, especially in the semis market in the first two months of 2015, Sucden added.
Semis exports from China were up 91% year-on-year in the first two months of 2015 to 770,000 tonnes, and “will have displaced western material, which has been one of the main factors driving down premiums in Asia”, according to the report.
Data for the first quarter shows this figure now stands at 1.2 million tonnes, up 43%. The additional production coming out of China and tighter nearby spreads have also made it harder to keep aluminium financed, meaning more material is returning to the market, Sucden said.
The company is forecasting a range of $1,720-1,850...