Yuan devaluation 'credit negative' for Al producers - Moody's

The devaluation of the Chinese currency will keep pressure on aluminium prices, which will be credit negative for producers, according to ratings agency Moody’s.

Moody’s does not expect aluminium prices and premiums to improve much in the next 12-18 months, based on downside risks from “uncertain and slow global economic recovery, and particularly the slowing growth rates in China”. Supply-side dynamics continue to be difficult, according to the agency, given excess capacity in China and a reluctance to close high-cost plants, as well as the emergence of new capacity, especially in the Middle East. “While demand excluding China remains [adequate], the ramp-up of new smelters, continued excess production in China and the overhang of inventories in financing transactions will continue to limit the ability for prices to...

Published

Claire Hack

August 17, 2015

01:30 GMT

New York