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LONDON (Scrap Monster): Barclays Capital analysts say their bearish view on aluminum was reinforced during London Metal Exchange Week, as meetings with producers revealed no plans to cut production despite surplus generation and low prices.

“Chinese production growth is expected to accelerate into 2013 short of an unlikely pullback in subsidy support, which will keep the domestic market oversupplied and support growth of semis exports,” the British bank added.

Meanwhile, for mined metals, operating and capital spending is being cut “more than the market probably appreciates, given the squeeze on miners by shareholder demands for more returns and comparatively less attractive yields on new projects,” Barclays noted.

“Not only do such cuts further raise the risk of supply disruptions for metals such as copper and nickel over the coming years, but the availability and cost of capital for project financing could become more challenging under proposed changes to banking capital adequacy under Basel III,” Barclays concluded.