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Home >> Business
UPDATED: 10:21, March 27, 2007
Metal sector set for bumper year
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Non-ferrous metal production in China is expected to grow by 15 percent this year, led by aluminum and copper, boosted by mounting demand, according to an industry organization.

The combined production of 10 main metals aluminum, copper, lead, zinc, nickel, stannum, magnesium, titanium, antimony and mercury will reach 22 million tons in 2007, up from 19.17 million tons last year, said Kang Yi, president of the China Non-ferrous Metal Industry Association.

The 2006 figure made China the world's top non-ferrous metal manufacturer for a fifth consecutive year.

Kang said aluminum production would climb to 11 million tons this year from 9.35 million tons in 2006.

In the meantime, copper production would increase to 3.45 million tons from 3 million tons, he said.

He said China's demand for non-ferrous metals would continue to grow this year thanks to booming metal-consuming industrial sectors such as real estate and cars.

But he didn't provide a specific forecast on demand for this year.

"Prices (of non-ferrous metals) will continue to sway at high levels this year," Kang said.

Last year, prices of many non-ferrous metals such as aluminum, copper, zinc and nickel hit record highs at home and abroad as a result of strong demand and hedge funds buying up metals futures.

Liu Defei, an analyst with Beijing-based metal industry consultancy Antaike Information Development Co Ltd, said domestic aluminum demand would surge by 28 percent to 10.8 million tons this year from 2006.

The growth is up from the 21 percent reported last year, Liu said.

Kang predicted China's production of alumina, the raw material used to make aluminum, would jump to 20 million tons this year from 13.7 million tons in 2006, driven by swelling aluminum production.

Li Yusheng, also from Antaike, said copper demand in China would rise by 5.5 percent to 3.8 million tons this year.

But the pace is down from the 9.2 percent posted in 2006, Li said, attributing this largely to high copper prices.

"Due to lofty copper prices, many copper users in China are shifting to other relatively cheap metals, such as aluminum and alloy, to cut costs," he said.

But the two Antaike analysts said prices of both aluminum and copper would decline this year from the sensational levels of 2006.

Liu said average aluminum prices in China would stand at around 18,000 yuan per ton this year, down from more than 20,000 yuan in 2006.

Meanwhile, Li said, domestic copper prices would tumble to some 50,000 yuan per ton on average, from 60,000 yuan.

Last year's bullish prices saw the non-ferrous metal industry rake in 110.03 billion yuan in profits for 2006, doubling the previous year's total, according to the association.

Fixed-assets investment in the sector reached 118.08 billion yuan last year, up 36.44 percent.The growth rate was down 6 percentage points from 2005 as a result of the government's macroeconomic controls.

Source: China Daily


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