Forecasts and market analysis based on price assessments from Fastmarkets MB and Fastmarkets AMM

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March 2019 | Aluminium Weekly Market Tracker

Primary and Secondary Fundamental Analysis

Analysis of consumption and production of primary aluminium, and an analysis of the market drivers of secondary aluminium and aluminium.

Demand Analysis:

China's VAT cut could boost commodities demand
China announced late week that the VAT cut for most industries from 16% to 13% will be implemented on April 1st. This, together with the increases in funding to local governments for infrastructure projects, are measures intended to stimulate domestic manufacturing activity and lower input costs for local companies.

We believe the VAT cut should help boost commodities demand, including aluminium, especially given that VAT rate for the transportation and construction sectors will also be lowered to 9% from the previous 10%. The construction and transportation sectors are the two largest aluminium consuming sectors in China – representing around 33% and 25% of the country's aluminum demand respectively. In fact, following the government's VAT cut announcement, major automotive producers, including BMW and Mercedes-Benz have all announced they will lower their car selling prices in China. Both BMW and Mercedes-Benz announced immediate...


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