17 May 2022 – With the official announcement that Shanghai is to come out of lockdown, China is providing an important economic stimulus that is likely to influence not only domestic but also global demand. LME aluminium inventories at record low.
China: Important economic stimulus, Shanghai comes out of lockdown
Chinese officials have now confirmed that Shanghai, with a population of more than 25 million, will come out of lockdown from 1 June 2022.
From 1 June to mid-late June, Shanghai will restore normal order to production and life across the city with the usual disease prevention and control measures, while strictly preventing a resurgence of the epidemic, Vice Mayor Zong Ming told the media.
The economy is expected to improve in May with the accelerated resumption of work and production in Shanghai and Jilin, as well as the implementation of pro-growth measures, Fu told official media.
This, combined with current growth policies, should give China a positive boost.
Chinese economy needs to catch up
Due to the strict two-month lockdown, the Chinese economy is likely to face significantly higher demand from abroad on top of all the existing and deferred investment volumes.
This is likely to boost demand for ferrous and non-ferrous commodities, such as steel, aluminium, copper and stainless steel, as other parts of the country will also increase their activities due to the relaxed pandemic restrictions.
LME aluminium stocks fall to lowest level ever
Aluminium stocks in London Metal Exchange (LME) warehouses fell to their lowest level since 1997.
Aluminium stocks in storage fell 9.7% to 260,275 tonnes, the lowest level since 1997, and are already down 63% this year, on the verge of a record annual decline. Robust demand and the closure of some smelters due to sharply increased energy costs have driven stocks down further.
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